ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Behind the Veil of Finance

Structural Roots of Global Economic Crisis

Things Fall Apart: From the Crash of 2008 to the Great Slump by Ramaa Vasudevan (Sage India), 2013; pp 227, Rs 695.

The 2013 Nobel in Economics to Eugene Fama, Robert Shiller and Lars Hansen for their work on importance and limitations of financial markets comes five years after a financial crisis that drove the US and world economies into their deepest recession since the Great Depression. The “great slump” has meant immense hardship for the entire global economy and has been at the centre of intense political and academic debates. The slim book under review provides an accessible, engaging and comprehensive discussion of the structural roots of the crisis. The discussion is not confined to merely the opaqueness of financial instruments and limitations of the financial markets. It shows how the financial crisis of 2008 was itself based on the real estate bubble building up in the US and the bursting of the same a year before the crisis.

Moreover, the roots of the crisis can be traced to the restructuring of class relations in response to the crisis of the 1970s, whereby profit incomes and financial incomes soared at the cost of wages. Another dimension of the crisis is rooted in the ascendancy of the dollar as the “international money”, which enabled the US to build up debts and deficits at the cost of the rest of the world and that the hegemony of the dollar is closely interlinked with the rise of the US as an imperial power.

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