Departmental Bulletin Paper 「連鎖的バブル崩壊と21世紀初頭大不況」
Burst of Repeated Asset Bubbles and Great Depression in Early 21 st Century

相沢, 幸悦  ,  Aizawa, Koetsu

82 ( 3 )  , pp.143 - 189 , 2015-03-20 , 法政大学経済学部学会
A series of asset price bubbles occurred in Asia, Europe, the U.S. and emerging markets in the late 20 th century. Globalization was the factor which systematically helped create the series of bubbles, while the spread of Internet and IT technologies and the development of financial engineering made them possible technically. After the “Lehman Shock” crashed asset bubbles of the U.S. and Europe in 2008, speculative money flowed into emerging markets, creating emerging-market bubbles and sharp increases in commodity and food prices. While the Lehman Shock led to the global economic and financial crisis, the panic was put down by aggressive fiscal spending and liquidity provision by governments and central banks in Europe and the U.S. Although those fiscal and monetary steps controlled the financial crisis, what then happened as a consequence was ballooning fiscal deficits at the government and a chain of fiscal and debt crises globally. As a result, central banks around the world are now playing the role too keep the economies and financial system from collapsing. This stage of covering up the panic with central bank money is the configuration of modern crisis. What that means is that we can’t stop central banks from providing money. This is what the great depression in the early 21 st century means.This is not a depression occurring as part of usual economic cycles. This great depression came as it became clear that capitalism can’t survive without adding social regulation to the pursuit of profit – the most distinctive characteristics of capitalism. This paper has made the following points. The great depression in the early 21 st century came as globalization created a series of of asset price bubbles around the world, which were to burst eventually. As a result, Japan, the U.S. and Europe conducted heavy fiscal spending to boost slumping demand to the levels to meet the excessive supplies boosted by the prior bubble. As those fiscal steps failed, central banks needed to come to take the lead. This is the current characteristics of modern capitalism, this paper argues.

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