The Current Global Economic Crisis: Gleaning from History

The study seeks to demonstrate how the knowledge of economic thought could help in explaining and managing the current global economic crisis. The current economic meltdown has affected nations of the world by differing degrees but adversely. Many analysts argue that the adoption of the Washington Consensusfinancial liberalization-gave vent to the crisis. The Washington Consensus discourages government involvement but promotes the operation of the market forces in economic and financial operations. However, the financial and economic devastation caused by the current economic crisis has prompted governments of various nations across the world to intervene through massive stimulus plans in order to rescue their economies from the meltdown situation. This suggests that the role of government in the economy is pertinent, and that the market forces are no substitutes but complement. This, therefore, suggests a fair balance of the government and the market forces in the operations of the economy.