Addressing the ‘Great Recession’ Using Kalecki’s Macroeconomic Analysis

Abstract

The global financial crisis of 2007–2009 and the subsequent ‘Great Recession’ have often been compared with the 1929–1933 financial crisis starting with the Wall Street crash and the ‘Great Depression’. The scale of the ‘Great Recession’ has for most countries not been as great as that of the ‘Great Depression’ due to the larger scale of government and the willingness to allow the ‘automatic stabilizers’ of fiscal policy to work with resulting large budget deficits. But recently the general tenor of debate has swung in the direction of austerity.