Financial Crises and Recession in the Global Economy, Third Edition

In this revised and updated edition, Roy E. Allen documents and explains major financial instabilities and trends across the global economy since the 1970s, including the crisis that began in 2008 and the long boom preceding it. The author expands our understanding of the most recent crisis using evolutionary and complex systems approaches, particularly ones that privilege the role of interactive knowledge and belief systems. Various large-scale economic crises are shown to be driven more by psychological and social constructs than is commonly understood. In both boom and bust, financial markets absorb money away from GDP uses; capital and wealth can be created, transferred, and destroyed across time and space more powerfully and independently of GDP processes than is generally thought. The author also advances our understanding of the free-trade versus mercantilism debate by showing that the US economy has benefited from what he calls 'money-mercantilism' at the expense of other regions of the world.

This learned yet accessible book will be of great value to a wide range of scholars, practitioners, policymakers, and interested observers of the global economy.