Arbeitspapier
The Monetary Economy and the Economic Crisis
The monetary economy has properties that cannot be analyzed using the tools of today's dynamic general equilibrium analysis. Keynes's economics, far from being an aberration in the otherwise orderly evolution of modern macroeconomics from Adam Smith's ideas about the "invisible hand", was a major contribution to an ongoing tradition in monetary theory in whose creation Smith himself had played a part. Retrospective consideration of this tradition suggests that the property of the monetary economy critical to the generation of economic crises and the stagnation that follows them is its capacity to permit trading at "false" prices, a phenomenon ruled out by assumption in dynamic general equilibrium models. Not only Keynes's explanation of depression but also Hayek and Robertson's analysis of the role of unsustainable forced saving in the boom can be thought of as relying on this factor.
- Language
-
Englisch
- Bibliographic citation
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Series: CHOPE Working Paper ; No. 2011-04
- Classification
-
Wirtschaft
History of Economic Thought: Classical (includes Adam Smith)
History of Economic Thought: Macroeconomics
General Aggregative Models: Keynes; Keynesian; Post-Keynesian
General Aggregative Models: Neoclassical
Business Fluctuations; Cycles
Money and Interest Rates: General
- Subject
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crises
money
monetary economy
general equilibrium
cycles
sticky prices
flexible prices
false prices
rate of interest
forced saving
Keynesian economics
Monetarism
New Keynesian economics
- Event
-
Geistige Schöpfung
- (who)
-
Laidler, David
- Event
-
Veröffentlichung
- (who)
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Duke University, Center for the History of Political Economy (CHOPE)
- (where)
-
Durham, NC
- (when)
-
2011
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Laidler, David
- Duke University, Center for the History of Political Economy (CHOPE)
Time of origin
- 2011
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