The downgrading of sovereign debt by the rating agencies may yet trigger another financial crisis. Jean-Paul Fitoussi explains what governments must now do to stop them from sapping the confidence of financial markets.
Today, the financial sector has become a primary governance agent and organizer of the real economy. Productivity growth and wage growth have been de-coupled., thus the new growth model is based on debt, not wages, as the source of demand growth.
OPEC has been the only organisation outside the sphere of power and influence of the West, which was able to influence deeply the world economy and also its politics.
The post-industrial paradigma has dominated last decades: The impact has been a new international labor division that is adverse to old industrial countries. It can't be dealt with through the currency policy.
