The Terrible Simplifers: Common origins of financial crises and persistent poverty in economic theory and the new ‘1848 moment’ Erik S. Reinert

This paper argues that long periods of economic progress in the core countries lead to in­creasingly abstract and irrelevant economic theories (‘terrible simplifications’). This leads to turning points towards more relevant economic theories. The paper further outlines the key variables that need to be re-introduced into economic theory in order to furnish poor countries with the type of productive structures that makes it possible to eliminate poverty.

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