Financial Dynamics and Business Cycles

<p>As the 55th anniversary of the bank holiday of March 1933 approached financial instability was a main topic in the financial press. Daily reports appeared of international debt crises of the covert bankruptcy of deposit insurance and of the near bankruptcy of one great financial institution after another. The great stock market crash of October 19 and 20 1987 demonstrated that extreme instability can happen. It is generally asserted that the consequences of October 19th and 20th would have been disastrous if the Federal Reserve and Treasury interventions had not set things right. In 1933 financial markets in the United States and throughout the capitalist world collapsed. In the light of historical experience the past <i>55 </i>years are the anomaly. The papers collected in this volume come from various backgrounds and research paradigms. A common theme runs through these papers that makes the collection both interesting and important: The authors take seriously the obvious evidence that capitalist economies progress through time by lurching. Whether a particular study starts from household utility maximization or from the processes by which productive structures are reproduced and expanded the authors are united in accepting the evidence that financial instability is a significant characteristic of modern capitalism.</p>