Challenges for Economic Policy Design - Lessons from the Financial Crisis

Abstract

The current economic and financial crisis highlights among other things that the dominant neo-classical theory has to be questioned. For example, not a long time ago, financial markets were seen as being efficient. The financial crisis showed that financial markets are not more or less efficient than any other market.In this book we widely deviate from the neo-classical model. It is not an attempt to replace the neo-classical theory nor do we have the space to comprehensively discuss it but we focus on specific areas of research: monetary and fiscal policies, economic growth, banking and regulation, the welfare state and heterodox economics.