How can we anticipate crises?

Elena Bianca Vieru

MPRA Paper from University Library of Munich, Germany

Abstract: Every crisis should teach us a valuable lesson. However, it seems that we learn almost nothing since they still occur from time to time strongly affecting the world economies. The basic question from where we started our research and to which we tried to answer as clearly as possible is the following: How can we anticipate future crises before they begin to make their presence felt on the global economic scene? The answer is both simple and handy, as the most consistent and relevant explanations in this regard come from the Austrian School of economics. We refer, in particular, to the theory of business cycle. Analyzing this problem, we discovered multiple causes, or better said clues that might help us anticipate and recognize the onset time of economic recessions. We will focus on two of them, considered to be the most important ones. The first clue is closely linked to an expansionary monetary policy that led to a deterioration of credit and to inflation. The second sign that we will be argued in this paper, a sign in close connection with the first clue, is due to the application of protectionist measures or, in other words, the second cause was actually the state’s interventionism.

Keywords: Austrian School; business cycle; crisis; expansion; interventionism (search for similar items in EconPapers)
JEL-codes: B25 B53 E32 E40 E51 G21 (search for similar items in EconPapers)
Date: 2011-11
New Economics Papers: this item is included in nep-hpe and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in The Annals of The "Ştefan cel Mare" University of Suceava. Fascicle of The Faculty of Economics and Public Administration 2(14).11(2011): pp. 128-134

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