Inequity as a cause of financial and debt crisis

Sajnoski, Krste (2012) Inequity as a cause of financial and debt crisis. „Тенденции и предизвикателства в развитието на икономиката“, Икономически Универзитет Варна.

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Abstract

There are several reasons for the financial crisis in the USA and the debt crisis in the Eurozone. Initially, imminent reasons for the crisis have been found in the spotlight. Such are the financial deregulation and the problems with secondary mortgage credits. But lately, when it has been seen that despite the huge financial support, the economies in the developed countries haven’t made a recovery, the attention has been turned towards the “invisible”, towards the causes that have contributed and enabled the “bubble economy” and the indebted countries to be developed, especially in the Eurozone. The growth in inequity in the USA and between separate countries in the EU i.e. in the Eurozone has been treated as a main reason. Although there are more reasons for the inequity, their common denominator is the free market and the distribution of values that are being created, in that sense that the development of relations in the national economies and among themselves, on the basis of free acting on the markets, do not generate sufficiently the final consumption because the share of workers in GDP has been decreased. This necessarily reduces the tendency for spending. The “bubbles” are a consequence of the governmental insistencies to ease the contradictions between the richer and poorer citizens in the USA and between the wealthier and poorer countries in the Eurozone. For this purpose in the USA, it has been led a relaxed monetary and fiscal policy whereas in the Eurozone, it has been overlooked to the non-compliance of the contractual limits for public expenditure and indebtedness towards abroad.

Item Type: Article
Subjects: Social Sciences > Economics and business
Divisions: Faculty of Economics
Depositing User: Krste Sajnoski
Date Deposited: 25 Dec 2012 11:24
Last Modified: 25 Dec 2012 11:24
URI: http://eprints.ugd.edu.mk/id/eprint/4337

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