Category Archives: Boom & Bust

Axel Leijonhufvud on the Causes of the Current Crisis

From Axel Leijonhufvud’s INET Berlin paper “The Unstable Web of Contracts”: “The bubble that burst was caused by a lengthy period of interest rates that were too low. We are now trying to cure the consequences by maintaining still lower … Continue reading

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VIDEO – William White at the Berlin INET Conference

Beginning at about the 5:30 mark former BIS chief economists William White explains why the Keynesian “solution” has failed and why the “Hayek vs Keynes” debate is one again: I’d also recommend Roman Frydman’s case against the Phelps / Lucas … Continue reading

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An important podcast on shadow money & the boom and bust cycle

I recently came across a terrific Bloomberg On The Economy podcast with James Sweeney and Carl Lantz on “shadow money” — assets which are used as the equivalent of money during the snowball of the asset bubble / artificial boom. … Continue reading

Posted in Boom & Bust, Money, shadow money | 2 Comments

AUDIO — HAYEK & THE CURRENT CRISIS

Economist John Cochran explains the significance of Hayek’s macroeconomics for understanding the boom of the ’00s’ and ongoing bust of the ’10s.

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ARTICLE: OVERINVESTMENT & THE VICIOUS CYCLE OF MANIAS & CRISES

“A Vicious Cycle of Manias, Crises and Asymmetric Policy Responses:  An Overinvestment View” by Andreas Hoffmann & Gunther Schnabi.  Abstract: Over the past three decades, we find that asymmetric policy responses heavily contributed to manias and bursting bubbles that eventually … Continue reading

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HAYEK’S MACRO IS THE BEST EXPLANATION — BRAD DELONG

It would be very hard to explain the current recession using Hayek’s macroeconomics in fewer words than has been achieved by Hayekian macroeconomist Brad DeLong: After the most recent downturn, however .. things have been different. The downturn was not … Continue reading

Posted in Boom & Bust, Brad DeLong | 4 Comments