Abstract
This chapter examines the causes and consequences of the financial crisis that hit world markets in 2008. It examines both the immediate and longer term causes, and relates these back to the discussion in the previous chapter. It then uses this discussion to reflect on the consequences of the crisis, for one of the outcomes of the crisis has been a strengthening of the argument that we are witnessing a global redistribution of power, away from the West and the US, and towards China, the other BRICs and the South. But to examine this question properly we first have to understand the causes of the crisis which, the last chapter suggested, are inextricably linked to the booms and financial crises after 1992 and especially after 2001. The chapter examines these issues in three sections. First, the immediate causes of the crisis are examined through a broad narrative account. Second, the causes are examined more deeply through an analysis which, instead of focusing so narrowly on interest rates and the US housing market, puts international factors at the centre of the analysis. The third section then uses this analysis to critically examine — and question — the claims that the outcome of the crisis is a further shift away from US power towards the South. This will involve some further discussion of the reasons for the boom that preceded the crisis, the limits of the rise of the South, and the question of US decline.
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© 2015 Ray Kiely
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Kiely, R. (2015). The South and the Causes and Consequences of the Financial Crisis, 2007–14. In: The BRICs, US ‘Decline’ and Global Transformations. International Political Economy Series. Palgrave Macmillan, London. https://doi.org/10.1057/9781137499974_5
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DOI: https://doi.org/10.1057/9781137499974_5
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-50540-1
Online ISBN: 978-1-137-49997-4
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