6. Global economic turbulence

Goal: the world economy trends 2008-2020 The purpose of this lesson is to approach to the trends of the world economy for the period 2008-2020, highlighting the reasons of the 2008-2013 crisis and describing the recovery cycle 2013-2018, in order to find out the outlook for a long-standing stagnant capital accumulation. At the end, we analyse the world economic impact of Covid-19 pandemic that started in 2020. Main content The first part addresses the origin of the crisis, known as Great Recession, taking into account the long waves theory under a period ruled by a financialised neoliberalism of State, providing some facts which creates divergent but linked trend among advanced, emerging and peripheral economies. The second part deals with the determining and ruling factors for a stagnant stage in the middle terms with deeper stagnation and recessions than before and weaker recoveries. In other words, profit rate trends, income distribution, productivity evolution, indebtedness levels, investment rate, energy crisis and, definitively, the classes struggle. The last part discusses on the probable triggering factors of a new and uneven recession or stagnation, depending on the regional role. The trade war, the depletion of the expansive monetary policy effectiveness, a new banking and financial crisis, or the failure of a big technological company will be considered. Finally, the pandemic was the unexpected trigger of the current economic depression.

Some debates to discuss at the end of the lesson: Each group, should focus in one these issues:

• Share what the economic impact has been this year in your country due to the pandemic. How this environmental and health phenomenon could change the economic international relations among the world regions?.

• Contrast the political economy response given in your country to the pandemic and identify the social impact in the social structure. What do you think about the so-called interruption of the fiscal consolidation policy?.

• Try to reflect to what extent, if so, the expansive monetary policy intensification could overcome the current crisis?. Is a good idea to grant subsidies to the employers for maintaining the employment?. Which consequences will be if the debt will increase?. What should be the priorities on political economy to face this depression?.

Some materials of interest in English

Michael Roberts: https://thenextrecession.wordpress.com/2018/02/14/the-underlying-reasons-for-the-long-depression/

Daniel Albarracín The crisis triggered by the pandemic and the economic policy of the European Union http://www.internationalviewpoint.org/spip.php?article6802