GCU academic's new book offers a new model of the economy

02 November 2012

Dr Kazem Falahati

Dr Kazem Falahati

A groundbreaking book that offers a new model of the economy will be published this week.

New Paradigms in Financial Economics: How would Keynes reconstruct economics? published by Routledge, presents a sharp critique of the existing models in economic theory and offers a new paradigm that can explain and predict economic behaviour.

Author Dr Kazem Falahati FCMA, CGMA, Senior Lecturer at Glasgow School for Business and Society said: “I believe this book heralds the most profound change in the history of economic thought since Adam Smith, as it proves without any doubt that the economy does not have an inherent tendency towards equilibrium, and that imbalances between demand and supply, and across different sectors, regions and over time are the natural order of the economy”.

The recent global financial crisis has made the inadequacies of the scientific state of economics and finance glaringly obvious, as these disciplines gave the false reassurance that such a self-destructive phenomenon could not happen. A similar phenomenon arose in the 1930s, when the pitfalls of the dominant economic theories were sharply exposed. Since then, the same analytical framework, in its new versions, has revealed a huge number of other empirical and experimental failures.

Dr Falahati said: “Left to its own, the free market economy, despite or perhaps because of its dynamic nature, can become self-destructive. The new paradigm helps discover the early signs of these dangerous tendencies, which the State, and in particular, the Central Bank, aided by an Independent Council of Economic Experts, can counteract.”

The book can be obtained here