Central Banking and Crisis Management from the Perspective of Austrian Business Cycle Theory

2019 ◽

pp. 550-584 ◽

Cited By ~ 1

Author(s):

Gunther Schnabl

Keyword(s):

Monetary Policy ◽

Central Bank ◽

Interest Rates ◽

Crisis Management ◽

Growth Dynamics ◽

Central Banking ◽

Business Cycle Theory ◽

Price Inflation ◽

Austrian Business Cycle Theory ◽

Austrian Business Cycle

This chapter analyzes the evolution 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 toward zero and a gradual expansion of central bank balance sheets. From a Wicksell-Hayek-Mises 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.

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Incorporating Social Capital into the Austrian Business Cycle Theory

Journal of Business Valuation and Economic Loss Analysis ◽

10.1515/jbvela-2016-0015 ◽

2017 ◽

Vol 12 (s1) ◽

Author(s):

Daniel J. D’Amico

Keyword(s):

Social Capital ◽

Business Cycle ◽

Central Banking ◽

Social Capital Theory ◽

Social Progress ◽

Business Cycle Theory ◽

Capital Theory ◽

Austrian Business Cycle Theory ◽

Recovery Processes ◽

Austrian Business Cycle

AbstractThis paper incorporates insights from social capital theory into the traditional Austrian business cycle theory (ABCT). Whereas in the standard Austrian narrative, recovery processes entail the reallocation of investment resources from more towards less-capital intensive industries, social capital may represent an alternative avenue for investment energies. Unique characteristics of social capital are surveyed and strategic opportunities for leveraging social capital by different decision maker types are explained. Recognizing social capital developments amidst business cycles helps to account for the long-term resilience and continual social progress of economic performance amidst increasingly interventionist central banking practices.

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Business Cycle and Stability of China’s Financial and Monetary System

REVISTA PROCESOS DE MERCADO ◽

10.52195/pm.v14i1.90 ◽

2020 ◽

pp. 123-171

Author(s):

William Hongson Wang ◽

Antonio Vegas García

Keyword(s):

Business Cycle ◽

Banking System ◽

Central Banking ◽

Jel Classification ◽

Shipping Industry ◽

Business Cycle Theory ◽

Austrian Business Cycle Theory ◽

Monetary System ◽

Austrian Business Cycle ◽

China’S Economy

The importance of China’s economy and the instability of China’s fi-nancial system are in the spotlight recently. This paper uses Austrian Business Cycle Theory to gauge the potential risks of China’s economy. The approach of this paper is a sector analysis, focusing on China’s monetary and financial system, shipping industry, and real estate industry, especially the state-owned enterprises in those sectors. We conclude that China’s central banking system is hurting China’s economy and we also propose reforms to overhaul the system, according to the perspective of praxeology and Austrian School Econom-ics. Keywords: Austrian Business Cycle Theory, China’s banking system, China’s economy. JEL Classification: B53, D8, E310, E32, E52, H12, N15, N27, N45, N65, O53, P11, R3, R4, Y10. Resumen: La importancia de la economía china junto con la reciente inestabili-dad del sistema financiero de China, preocupan al resto del mundo. Este artí-culo usa la Teoría Austriaca del Ciclo Económico para identificar los riesgos potenciales de la economía de China. En este artículo realizaremos un análisis sectorial, enfocado en el sistema monetario y financiero de China, el sector de la construcción, la industria marítima y, en especial, las empresas estatales de dichos sectores. Concluimos que el actual sistema de banca central en China está dañando a su economía y proponemos soluciones desde la perspectiva de la praxeología y la Escuela Austriaca de Economía. Palabras clave: Teoría austriaca del ciclo económico, sistema bancario chino, economía china.

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