D69 - Welfare Economics: OtherReturn

In the globalised world of the past decade, the characteristic movement of the real economy in Europe has been in the lower amplitudes of the economic cycle and has been complicated by the low effectiveness of fiscal and monetary policy tools and instability on the financial markets, which, in relation to the real economy, display features of autonomy and virtuality. The exchange rates of the euro, rouble and Czech crown display exceptional volatility, while the yields from financial instruments are at a historic minimum. These phenomena are the result of the stagnation of the European economy, a high level of indebtedness and an inability to effectively solve escalating political problems, such as military conflicts, terrorism, mass migration, economic sanctions, etc.

The authors of the article point out that economic theory has failed to yield a solid theoretical background in critical situations such as the current financial and economic crisis and the transformation of post-communist economies. Mainly the present crisis opens the question of the unsatisfactory status of economic science. While classical liberal or Keynesian concepts are failing, theorists cannot look to mathematical modelling for help. It seems that traditional concepts malfunction, and the financial market is particularly predisposed for this process. The application of mathematical models is overvalued. The article calls attention to the possible influence and adequacy of regulatory attitudes on a return to equilibrium. It seems that the part of ethics must be upgraded decidedly. The challenge for today's theoretical economists is to find a new paradigm of economic science for today's global era.