ECONOMIC CRISIS: CHALLENGE FOR ECONOMIC THEORY AND POLICY

Abstract

Crises are truly social phenomenon and that is why they have strategic importance and require increased state regulation. The global economic crisis of 2008 has rapidly mastered the world and significantly affected national economies. The aim is to show that economic crisis has always represented a great challenge for economic theory and policy, and that the theoreticians and practitioners demonstrated the need to create a new model of economic growth and change the dominant theoretical paradigm. There are many findings but the most important ones are as follows: The recent crisis has shown how unregulated market can lead capitalism to its disaster. Neoliberal doctrine had a strong negative impact on policy which helped spread of the crisis. It was a sign that it is necessary to create a new theoretical and macroeconomic paradigm and a new model of economic growth that would be the answer to the recent economic crisis because it has shown that the neoliberal mode of economic policy has been wrong and ineffective in terms of the global economic crisis. In process of continuous global changes, it is necessary to build a stable society, which is going to be humane and socially balanced