Our economic system still fails to allocate enough funds to strategic investments such as infrastructure, industry and education. Alexander Tziamalis tells how our times call for important economic and policy decisions.

On the 15th of September 2008, Lehman Brothers, an investment bank with assets of $640 billion and debts of $620 billion, went bankrupt (Lioudis, 2017). The demise of this old and iconic business with assets worth more than the gross domestic product of a medium-sized economy amplified the panic that had already started to engulf most financial markets. By October 2008, over $10 trillion of market capitalisation had been eroded from global equity markets and systemic banks such as AIG, Merrill Lynch, HBOS, Alliance &Leicester, Royal Bank of Scotland, Bradford & Bingley and Hypo were expected to follow the fate of Lehman Brothers. The recession had started.

“A repeated lesson from history is that angry citizens will vote for short-sighted, nationalistic solutions.”


So, where does this leave us? In many countries affected by the 2008 crisis, the situation economically is fragile with public debts higher than ever before, various productivity challenges and monetary policies spent, after a decade of artificially bolstering aggregate demand. Worse, the financial crisis of 2008 has contributed to the rise of populist parties in many western countries.

You need to login to view the rest of the content. Please . Not a Member? Join Us

Leave a Reply

Your email address will not be published. Required fields are marked *