Egalitarianism and the Great Recession: A Tale of Missed Connections?

Abstract

The main aim of this paper is to act as a corrective to the comparatively deafening silence of egalitarian political philosophy's response to the Great Recession. The paper thus provides an accessible analysis of a new strand of empirical research into the causes of the crisis. This new literature, which has largely gone unnoticed by the broader philosophical community, maintains that the main driver of financial instability is income and wealth inequality coupled with income stagnation at the bottom of the income distribution. Building on this empirical research, the paper puts forward six connections between egalitarian political philosophy broadly construed, and the findings of the new literature it surveys. These connections are understood as operating in two directions: that is, they both provide reasons for egalitarians to play a larger role in debates concerning the moral aspects of financial instability, and also offer valuable insights to egalitarians to reorient their position concerning central facets of their arguments.

The impact of green growth on financial stability

“…In relation to the economic dimension of green growth, preliminary empirical literature studied the stability-growth nexus through the financial-led growth hypothesis. The wide-ranging literature (Goldsmith, 1969; McKinnon, 1973; King and Levine, 1993; Rajan and Zingales, 1998; Levine et al , 2000) found a positive impact of FS on economic growth. Most recently, Denk and Cournède (2015) has also found a positive relationship between financial development and economic growth in the long run and he suggested that financial development is the main driver of causality in economic growth in the cross country analysis of Organization for Economic Cooperation and Development (OECD) countries.…”