A Critical Perspective on the Doctrinal Approaches Regarding the Economic Crises

• Author: Adina Dornean - Vasile Isan
• Position: Assistant Professor, PhD, Faculty of Economics and Business Administration, 'Al. I Cuza' University, Iasi, Romania - Professor PhD, Faculty of Economics and Business Administration, 'Al. I Cuza' University, Iasi, Romania
• Pages: 460-471

European Integration - Realities and Perspectives 2012

460

A Critical Perspective on the

Doctrinal Approaches Regarding the Economic Crises

Adina Dornean

1

, Vasile Ian

2

Abstract: The aim of the pr esent paper is to analyze comparatively the main economic theories r egarding the

economic crises, including the premises for starting the present financial and economic vulnerabilities on

national and international level. On ideological level, the present global financial and economic crisis, similar

to the other ones t hroughout history, initiated an intellectual debate a mong several applicable theories: Adam

Smith’s “invisible hand” liberal theory, Keynes’s state interventionism theory and even neo-Marxist theories.

The issue of the economic cycle and the crisis is a very complex one that cannot be analyzed and explained in

a few pages, because talking about the crisis and the economic c ycle supposes an analysis of all aspects of the

market ec onomy. Thus, w e try t o found out which of these theories best explain the economic cycles and

crises and we believe that the Great Depression of ‘29-‘33 confirmed t o a great extent the “Austrian” theory

of the economic cycle.

Keywords: economic cycle; crisis; Keynesianism; creative destruction; animal spirits

JEL Classification: B12; B25; B53, H13

1 Introduction

The global financial and economic crisis that started in 2007 is probably the most serious crisis after

the Great Depression, during the last 80 years. It is a reason for reopening the debates, meditations,

questions regarding the causes for the starting of this crisis, the effects and the solutions for coming

out of recession.

The opinions regarding the elements that started the crisis differ among the specialists from this area.

On the one hand, there are opinions according to which the state intervention made po ssible the

starting of the financial and economic turbulences that we experience and the involvement of the

public authorities will not attenuate the economic difficulties, and on the other hand, there are voices

that say that the starting of the crisis is based on the inadequate behaviour of the economic agents,

characterized by selfishness, greed, speculation, etc. Without pretending to counterpoint a personal

point of view comparable as level, the goal of the present paper is to analyze comparatively the main

economic theories regarding the economic crises in order to identify the theory that best explained the

economic crises.

2 Conceptual Approaches regarding the Economic Cycle and the Economic Crisis

Thus, first of all, we would like to explain the concept of “crisis” and in this context, we have to

approach a notion without which we cannot offer explanations, namely that of “economic cycle”.

1

Assistant Professor, PhD, Faculty of Economics and Business Administration, “Al. I Cuza” University, Iasi, Romania,

telephone no +40 232 201610 , fax no +40 232 217000, Corresponding author: amartin@uaic.ro.

2

Professor PhD, Faculty of E conomics and Business Administration, “Al. I C uza” University, Iasi, Ro mania, tel.: +40 232

201402, fax no +40 232 217000, visan@uaic.ro.