Comparative Research On Western Economic Crisis Theories

In August 2007, to avoid severe financial turmoil, the Federal Reserve, European Central Bank, Bank of Japan injected great funds to the market. This measure officially manifested the outbreak of the U.S. subprime crisis. The outbreak quickly spread to the whole world, from the virtual economy to the real economy, exerting severe impact on the global economy, especially on the economy of developed countries. In 2010, the global economy has eased, but not yet been out of the shadow of the subprime crisis. Since the outbreak of the subprime crisis, scholars have explored its root causes from many different perspectives. However, most studies just focus on this crisis, discussing the shortcomings of the current financial system and monitoring system. The author of the paper believes that the outbreak of the U.S. subprime mortgage crisis has historical inevitability and the fundamental reason can only be found from historical perspective.Since the mid-18th century, economic crises in capitalist countries have broken out now and then, at the same time, mainstream western school of economics also changed constantly to adapt to new economic situations. The replacement of the mainstream western school of economics led to the change of economic policies in capitalist countries. Under such circumstances, capitalist economy develops and capitalist economic crisis also continually changes form of outbreak. Starting from a historical perspective, this paper will explore the important relationships between economic crisis theories of mainstream western schools of economics and all previous economic crises, thus to see the historical inevitability of the subprime mortgage crisis. This study, having more important theoretical and practical significance in exploring the root causes of the subprime mortgage crisis, makes the current researches on the subprime mortgage crisis more systematic.Theories on the root causes of current subprime mortgage crisis are generally divided into two groups--the Western capitalist economics and Marxist economics. From the perspective of the analysis of Western economics perspective, the outbreak of the crisis is an "accident" caused by improper operation, and is not necessarily related to the capitalist system because its form is different from previous ones. This kind of analysis approach lacks concern on the development of the capitalist system from the perspective of history and it can not find the institutional reasons for the subprime mortgage crisis. Although there is some analysis from the "human" point of view, it is restricted by the traditional logic of Western economics. Moreover, explanation the reasons for the sub-prime crisis from the perspective of Western economics are to safeguard the interests of capitalism and it can not make out the role played by the capitalist system in this crisis, thus can not fundamentally resolve the crisis. Researches from the Marxist political economy perspective reveal the current contradictions in the capitalist world from different angles. However, most of them examine the nature of the current contradictions of capitalism from the real U.S. contradiction, not from the world scope. The current analysis is not systematic enough and the analysis logic is somewhat too simple.Based on Marx's understanding of the capitalist economic crisis, this paper tries to break through the isolated researches on the subprime mortgage crisis by Western economics. From a historical perspective, this paper reveals the historical inevitability of the sub-prime crisis. On this basis, this study complements Marxist Political Economics. But the outbreak of the subprime crisis was not caused by one reason. It is the product of history and the complexity of world's economic relations. As the author's academic capacity is limited, he may not reveal all the reasons and suggestions will be accepted.