Institutional and structural change of capitalism under the effect of the 2008 crisis: Economic policies with expanded intervention limits and money creation dynamics

Since the first signs of the crisis were observed, an ongoing debate on whether an economic breakdown triggered a radical change in monetary policy and central banking with the 2008 financial crisis similar to the Great Depression of 1929. The relevant issue can be directly correlated with the expanding limits of state interventions and the institutional elements of capitalism through capital-crisis interaction. Concordantly, the links between the concepts are explained based on pre-2008 central banking applications with an inductive and qualitative observation methods taking into account Thomas Kuhn's paradigm change approach. In this thesis, the money creation function of a central bank is determined as the area where the possible paradigm shift occurs. Based on this function, the expanding interventions of various governments throughout the 2008 crisis are correlated with the decentralized governance choices of said central banks. Thus, the existence of a distinct institutional breakdown in the policy making function of central banks in related fields compared to the pre-crisis situation and its response to the change in the paradigm were analyzed. Even though related interventions caused central banks to loosen their decentralized management elements during crisis periods, the banks revert to their previous conventional working principles after a while. The principle long-term impact of crises on banks is not related to decentralization at the national level. Central banks increase their tendency towards international centralization due to the increasing importance of economic security, global financial safety nets and the effects of financial crises. It was determined that the paradigm shift, within the limits of this thesis, could not meet the required conditions, and it was observed that central banking was not subjected to a paradigm shift process in the policy-making ability of a money-making function with expanded intervention boundaries. This thesis concludes that no concrete argument has yet been obtained regarding the existence of a radical change developed after 2008 in the axis of the dominant paradigms of central banking. Keywords: Paradigm shift, 2008 crisis, decentralized governance, paradigm shift for central banking system