what is economics crash course

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What is Crash Course?

Crash Course is a platform designed to open up debate on how we can move out of the current crisis and make the necessary steps towards achieving social, economic, ecological and regenerative justice.

How can I get involved with Crash Course?

Feel free to contact us with ideas for webinars – or to help out in organising events.

How was finance driven economics rescued?

The finance-driven economic model was rescued by extreme measures taken by central banks in developed economies, which embarked on ‘unconventional monetary policy’. One of these policies was the massive purchase of assets by central banks, primarily government bonds, with instantly created money.

Why did the Dutch and German central banks criticize the ECB's QE policies?

The Dutch and German central banks criticised the ECB’s QE policies on the grounds that they would reduce the disciplining effects of markets on corporations. In their opinion, this would result in zombie companies. Ben Bernanke, the former Chair of the US Federal Reserve, responded to the lack of monetary theory: “The problem with QE is that it works in practice, but it doesn’t work in theory.”

How did QE affect the financial system?

The QE money that was injected into the financial system remained circulating in the financial system instead of reaching the real economy. QE blew bubbles in real estate markets and stock markets. The asset-owning class – the rich – became even richer. Everyone else was confronted by austerity policies – after all, someone had to pay the bill.

Why was QE policy controversial?

QE policies were controversial right from the start. While the community of central bankers had always displayed a unified front, QE policies led to a visible split on several issues. The Bank for International Settlements, for example, refuted the claims made by the European Central Bank (ECB) that QE money was reaching the real economy.

What was the QE programme?

The Quantitative Easing (QE) programmes of central banks in the Global North injected trillions of dollars into the financial system after the global financial crisis of 2007, paving the way for another round of potential debt crises today. The surplus of capital and low interest rates in developed economies led to a rise in capital flows to developing countries. Then Covid-19 came along. Again we saw an unprecedented increase in money being injected into the financial system by central banks in the Global North. This rising tide of capital flows has the potential to result in a new period of ‘lost decades’, provoked by debt crises.