The Current Economic Crisis in the United States

This paper offers an analysis of the current economic crisis in the United States that began in 2008, which is understood not as a business cycle recession but as a structural crisis. It presents a case that the current economic crisis is a particular type of crisis of over-investment, called an asset bubble induced over-investment crisis. It explains what is meant by that type of crisis and presents empirical evidence for the period since 1979 that supports this interpretation of the crisis. It argues that the forces that led to the current crisis cannot be seen in the behavior of the rate of profit. JEL Classification: E11, E32, N12