Category Archives: Boom & Bust
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
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
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
Economist John Cochran explains the significance of Hayek’s macroeconomics for understanding the boom of the ’00s’ and ongoing bust of the ’10s.
“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
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