The Economic Institutions of Capitalism
Journal title QA Rivista dell’Associazione Rossi-Doria
Author/s Paolo Leon
Publishing Year 2013 Issue 2012/4 Language Italian
Pages 30 P. 7-36 File size 839 KB
DOI 10.3280/QU2012-004001
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The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray. Part of the problem is due to Smith’s "veil of ignorance": individuals unknowingly pursue society’s interest and, as a result, have no clue as to the macroeconomic effects of their actions: witness the Keynes and Leontief multipliers, the concept of value added, fiat money, Engel’s law and technical progress, to name but a few of the macrofoundations of microeconomics. A good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan’s economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker’s Rule. Very simply, the banks, whose lending determined deposits after Roosevelt, and were a public service became private enterprises whose deposits determine lending. These underlay the great moderation preceding 2006, and the subsequent crash.
EconLit Classification: E000, E400, B120
Keywords: Macro foundations of microeconomics, Smith’s veil of ignorance, Fiat money, Endogenous money, Leverage.
- Retribuzioni e produttività: un nuovo modello di contrattazione per fermare il declino Davide Antonioli, Paolo Pini, in PRISMA Economia - Società - Lavoro 1/2014 pp.79
DOI: 10.3280/PRI2014-001006
Paolo Leon, Le istituzioni economiche del capitalismo in "QA Rivista dell’Associazione Rossi-Doria" 4/2012, pp 7-36, DOI: 10.3280/QU2012-004001