No abstract

PurposeThe purpose of this paper is to expand understanding of the current global financial crisis in light of other large‐scale financial crises.Design/methodology/approachThe phenomenon of large‐scale financial crisis has not been modeled well by neo‐classical general equilibrium approaches; the paper explores whether evolutionary and complex systems approaches might be more useful. Previous empirical work and current data are coalesced to identify fundamental drivers of the boom and bust phases of the current crisis.FindingsMany features of financial crisis occur naturally in evolutionary and complex systems. The boom phase leading to this current crisis (early 1980s through 2006) and bust phase (2007‐) are associated with structural changes in institutions, technologies, monetary processes, i.e. changing “meso structures”. Increasingly, purely financial constructs and processes are dominant infrastructures within the global economy.Research limitations/implicationsRigorous analytical predictions of financial crisis variables are at present not possible using evolutionary and complex systems approaches; however, such systems can be fruitfully studied through simulation methods and certain types of econometric modeling.Practical implicationsCommon patterns in large‐scale financial crises might be better anticipated and guarded against. Better money‐liquidity supply decisions on the part of official institutions might help prevent economy‐wide money‐liquidity crises from turning into systemic solvency crises.Originality/valueScholars, policymakers, and practitioners might appreciate the more comprehensive evolutionary and complex systems framework and see that it suggests a new political economy of financial crisis. Despite a huge scholarly literature (organized recently as first‐ second‐ and third‐generation models of financial crises) and a flurry of topical essays in recent months, systemic understanding has been lacking.

No abstract

No abstract

PurposeThe purpose of this paper is to present a “human ecology economics (HEE)” framework for understanding economic growth and development challenges in Eastern Europe.Design/methodology/approachThe HEE approach relies on evolutionary and complex systems processes; it expands the field of ecological economics by incorporating interdisciplinary material from the humanities; and it allows a long‐run perspective with a focus on sustainability of human systems. Using this framework and primary research from Hungary, Estonia, and Azerbaijan, challenges to Eastern European development are identified.FindingsThe main limit to Eastern European sustainable development is not “production capital”, i.e. the availability of natural resources, fixed human‐made capital, and intermediate consumption, but instead shortages of “transaction capital”, i.e. “social capital, informational capital, and financial capital.”Research limitations/implicationsRigorous analytical models of, and precise predictions of, change in the human ecology are at present not possible using evolutionary and complex systems approaches; however, Eastern Europe can be fruitfully studied through the HEE approach, and certain simulation methods and lessons from recent history are suggested.Practical implicationsGreater support for various kinds of transaction capital is recommended, including for social and communication networks, for information exchange between small and medium size businesses, for innovation and creative learning by doing, for financial intermediation, for better inter‐party cooperation at the national level, etc.Social implicationsThe need for greater social cooperation, including a reduction in discrimination exercised by dominant individuals or groups, arises as a more important pre‐condition for sustainable economic growth than is commonly believed.Originality/valueScholars, policymakers, and practitioners might appreciate the more comprehensive interdisciplinary framework for understanding economic growth and development challenges in Eastern Europe, especially the role played by intangible belief systems, social agreements, and levels of cooperation.