Regulation School - Crisis

Crisis

Regulationist economists make a distinction between cyclical crisis and structural crisis. They study only structural crisis, which are the crisis of a mode of regulation. From this distinction, the regulationists have made a typology of the crises which gives an account of various disarrangements in the institutional configuration - according to its initial objective which was to understand the rupture of the fordist mode of regulation:

• the exogenic crises are due to an external event: they can be very perturbing, but cannot put in danger the mode of regulation, and even less the mode of accumulation. The New Classical Economists (or economists of the school of rational anticipations) consider that all crises are exogenic.
• the endogenous crises are cyclical crisis which are necessary and inevitable, for they make it possible to cancel imbalances accumulated during the phase of expansion, without major deterioration of the institutional forms. These crises are indissociable of the operation of capitalism.
• the crisis of the mode of regulation: unable to avoid a downward spiral, the institutional forms and the way the State intervene in the economy must be modified. The best example is that of the crisis of 1929 where the free play of market forces and competition did not lead to a renewed phase of expansion.
• the crisis of the mode of accumulation means that it is impossible to continue the long-term growth without major upheaval of institutional forms. The crisis of 1929 is the best example: the period of the inter-war period marks the passage of a mode of accumulation characterised by mass production without consumption of mass to a mode incorporating all at the same time, mass production and consumption.