![]() ![]() ![]() According to this mainstream view the GFC was an example of a massive market failure due to the inherent instability of private capitalism, a failure which was triggered by the liberalization of international capital transactions in the 1980s and the national deregulation of financial markets in the late 1990s (e.g. Although the current divergence in political opinion, towards both the extreme left and the extreme right can be traced back to a number of complex socio-economic issues, one clear reason for the trend is the prevailing, rather one-sided, analysis of the origin and economic nature of the GFC and its pre-Corona aftermath. However, it is still somewhat surprising that apparently otherwise reasonable people in the media or politics can remain so blind to the potential disadvantages of heavy socialist intervention, either in housing or in other sectors of the economy. ![]() Such anti-capitalist preferences can to some extent be explained away, at least as far as the young are concerned, as stemming from a lack of experience regarding the historic evils of socialism. Thirteen years after the GFC, general approval of free markets appears to be at an historical low, particularly among Western millennials who now seem to favor soft forms of socialism. In the aftermath of such crises, it is no surprise, for example, that in former East Germany, thirty years after the fall of the Berlin wall, those calling for a return to communism or a rebirth of socialism (with a green face of course) are now gaining in elections. This then leads to calls for some form of regulatory intervention, either by the state, or by some other ‘big player’ such as the central bank. ![]() Summary of neo-Austrian views on the GFC and its pre-Corona aftermath.ĭeep financial crises entailing widespread bank credit, such as the Global Financial Crisis (GFC) 2007/2008, are often seen as being the result of unfettered capitalism. Without producing an economic downturn or bust. The main question here is why such policies can continue This is followed by discussion of radical neo-AustrianĬritiques of the unconventional monetary policies used to reflate the U.S.Įconomy after the GR. Then, neo-Austrian extensions of basicĪBCT are applied to an explanation of the U.S. Following an introduction to the main topic, theīasic elements of ABCT are presented. How do neo-AustrianĪuthors manage to cope with such a fact? Such are the research questions dealt economy since the GR, a boom which has beenĮngineered by anti-Austrian ultra-loose monetary policy. Why has this failed to materialize? We have currently experienced The Great Recession (GR) must at some point lead to a 1970s-style period of (Fed) and the enormous government deficits run by U.S. Stated that the unprecedented monetary inventions by the U.S. subprime crisis and the GFC? For example, the neo-Austrian What extent the basic Mises-Hayek cycle theory can be applied to an explanation Is rejected by the mainstream, or is it rather the lack of correspondenceīetween ABCT and the stylized facts of business cycles, such as the positiveĬorrelation between consumption and investment? We also need to ascertain to Neo-Austrian bias towards the supremacy of an unfettered market economy which Therefore, weĪlso need to ask why mainstream economists dismiss ABCT. Neo-Austrian explanation of crises, nor its policy implications. Is also true that mainstream macro-economists, although struggling heavily toĬome up with a suitable theoretical explanation of the GFC, neither accept the subprime crisis and its aftermath? In contrast, it We thus ought to ask, what are the basic tenets of theĪustrian Business Cycle Theory (ABCT) and how did it enable some economists toĬorrectly predict the U.S. Opponents of neo-Austrian macro-theory have meanwhile begun to accept someĪustrian insights. More surprising is that even relatively fierce Vindication of (neo-) Austrian cycle theory ( Hunter,Ģ018 ). housing bubble and the subsequent GFC, apparently, a clear With the Austrian school, or those using neo-Austrian insights, correctly It is also true that several economists associated Interest in the views of (neo-) Austrian economists on macro-economic crises,Įspecially financial crises. (GFC) 2007/2008 the sales of Hayek’s (1944) Road to Serfdom quadrupled, a clear indication of renewed public In the aftermath of the Global Financial Crisis ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |