Sustainability of modern economic systems

Abstract

The world economic crisis that began in 2007 is a phenomenon comparable only to the crisis of 1929. The depth of the crisis, which is still ongoing, is hidden by state interventions and its effects are more visible on the employment side in relation to the fall in the gross social product (GDP). The costs of the crisis are enormous and are reflected in the lost GDP growth, in the tremendous growth of public debts and the huge monetary expansion, the consequences of which are not clearly visible for now. Developed countries are re-examining the prevailing monetary practice and showing much greater tolerance towards inflation than at any time in the past three decades. The introduction of stronger financial regulation is underway, especially in the countries of the European Union. There is no agreement on the world stage regarding the degree of control that should be introduced in the financial sphere, and developing countries are always much more vulnerable in financial crises because they cannot be financed by printing money. The risk of crisis is more clearly seen through the current balance deficit and the level of external debt, than through the level of the budget deficit and the level of public debt.