Arbeitspapier
Central Banking and Crisis Management from the Perspective of Austrian Business Cycle Theory
The paper analyses the evolvement and effects of central bank crisis management since the mid 1980s based on a Hayek-Mises-Wicksell overinvestment framework. It is shown that, given that the traditional transmission mechanism between monetary policy and consumer price inflation has collapsed, asymmetric monetary policy crisis management implies a convergence of interest rates towards zero and a gradual expansion of central bank balance sheets. From a Hayek-Mises-Wicksell perspective asymmetric central bank crisis management has contributed to financial market bubbles, decreasing marginal efficiency of investment, increasing income inequality and declining growth dynamics. The economic policy implication is a slow but decisive exit from ultra-expansionary monetary policies.
- Language
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 6179
- Classification
-
Wirtschaft
Monetary Policy
Central Banks and Their Policies
International Policy Coordination and Transmission
Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
- Subject
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Hayek
Mises
Wicksell
monetary overinvestment theory
asymmetric monetary policy
financial crisis
Goodhart’s Law
marginal productivity of investment
secular stagnation
- Event
-
Geistige Schöpfung
- (who)
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Schnabl, Gunther
- Event
-
Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
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Munich
- (when)
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2016
- Handle
- Last update
- 10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
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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
- Schnabl, Gunther
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2016
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