Abstract. The causal-realist approach to political economy, characteristic of the Austrian School, readily explains the causes behind credit cycles and the distinct phases between booms and busts. An underlying relationship between money, banking, property, contracts, and entrepreneurship is the key dynamic. Policy interventions that that allow financial institutions to violate monetary property rights impart systemic risk leading to vacillations between periods of rhapsodic expansion and distressed contraction. Escaping the crisis cycle requires adopting policies that affirm monetary property rights, enforce deposit contracts, and denies any political authorities that inhibit the choice of a commodity-based currency, or tolerates the legal abrogation of fiduciary responsibility relative to money substitutes. Only when credit issuance is restrained by the level of genuine savings in proper money will a natural rate of interest harmonize the structure of production with consumer preferences.
Alan : Sosyal, Beşeri ve İdari Bilimler
Dergi Türü : Uluslararası
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