In “Monetary Theory and the Trade Cycle” Hayek holds that the business cycle is caused by fractional-reserve banking, which is a natural credit organization formed out of the market. If this is the case, then it follows that economic cycles are an intrinsic part of capitalism.
Posts Tagged ‘trade’
Did Protectionism Cause the Great Depression?
The debate on whether or not the Smoot-Hawley Tariff directly contributed to the Great Depression and/or worsened the industrial decline remains alive and well. Paul Krugman does not believe that the Smoot-Hawley Tariff had a major effect. It did, and it should be studied and the lessons applied to current political trends.
Globalization and Culture
Globalization has been blamed for a large number of negative effects. Mary E. Clark presents one of these. She believes that globalization has forcefully ruined cultures around the world, leading to a breakdown of small societies.
Introduction to the Austrian Business Cycle Theory: Explaining the Boom & Bust
The business cycle has been attributed to many factors by many different economists, but other than the Austrian Business Cycle Theory, none have been able to pinpoint the exact causations for an economic recession (or depression). The only theory which has consistently been able to cause the business cycle is the Austrian theory; a theory which presents the problem as a problem of fractional-reserve banking.
