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.
The hypnotic attraction of the mathematical modelling of rational expectations and efficient market theories seduced many self-assumed Keynesians into unconsciously denying him. But just ‘going back’ to reading The General Theory is not enough.
Prof. Bhagwati criticizes the “fascination with manufacturing”, asserting that services could take the place of industrial employment. The German experience shows the contrary.
IL Prof. Bhagwati critica il "fascino dell'industria" e sostiene che i servizi possono sostituire l'occupaizone industriale; ma l'esperienza della Germania dimostra il contrario.
The failure to directly help households has been a grievous policy error. Refinancing still viable mortgages would provide a big boost to the distressed corner of the household sector and purchases of state government bonds could help avoid cutbacks to state and local government employment
