To What Extent Does The Recent Global Financial Crisis Constitute A Paradigm Crisis?

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To What Extent Does The Recent Global Financial Crisis Constitute A Paradigm Crisis?
The essay critically look to what extent does the recent global financial crisis constitute a paradigm crisis. From 1930s, there have been two occasions of global financial crisis (Keynesianism and neoliberalism), the most recent one being between 2007 and 2008. In his journal, Wade (2008) noted that there are differences between the recent and the past global financial crisis in terms of causes of the crunch, repercussions, government responses and credit and credibility which then brings crisis on model of the same. He holds the opinion that there is need therefore to rethink about global financial crisis and give room to variety of standards rules.
Compared to the earlier global economic crisis which favored embedded liberalism, the recent one moved back towards the norms of laissez-faire prescribing a roll-back of government intervention and expansion of market. According to Wade, 2008 the events of September 2008 clearly suggests that we have entered a new phase in terms of global financial crisis in which the efficient market hypothesis plus its prescriptions seem not to yield desired fruits.
For instance, in this period a number of businesses such as Freddie Mac and Fannie Mae were nationalized, AIG was bailed out for a promise of $85billion, surprisingly, the US Treasury planned to buy $700billion of toxic security from a bank in financial crisis,. At a price above the then market price, this was rejected and later modified by the House of Representatives. Recently, it has been ...