Monetary equilibrium and price stickiness: Causes, consequences and remedies

Bagus, Philipp; Howden, David

doi:10.1007/s11138-011-0151-7

Cited by 15 publications

(6 citation statements)

References 25 publications

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“…As we have noted here and in Bagus and Howden (2011a) fiat money issuances will result in troublesome wealth transfers and potentially provoke a costly business cycle. Better to let prices do the work then to explore the complex issues with changing the money supply that might go awry.…”

mentioning

confidence: 70%

Monetary equilibrium and price stickiness: A rejoinder

Bagus

Howden

2012

Rev Austrian Econ

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confidence: 70%

Monetary equilibrium and price stickiness: A rejoinder

Bagus

Howden

2012

Rev Austrian Econ

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“…A fractional reserve banking system does not only imply severe ethical and legal problem [75][76][77][78][79][80][81], it also exerts economic consequences such as redistribution [82] and recurring cycles of boom and bust. These business cycles portray the inherent instability of a fractional reserve banking system which has been analyzed extensively in the literature [83][84][85][86][87][88]. Moreover, as banks can fail (due to risky and hazardous practices), governments enforce a deposit insurance model to protect depositors with the support of central banks instead of encouraging a bail-in of bank creditors in case of bank troubles [89,90].…”

Section: Proposal Of Paradigm Change Towards a Sustainable Modelmentioning

confidence: 99%

Principles of Monetary & Financial Sustainability and Wellbeing in a Post-COVID-19 World: The Crisis and Its Management

2021

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This paper analyses the COVID-19 crisis and its management from the perspective of Austrian Economics. The attention focuses on the State’s coercive intervention according to the principles of political economy, capital theory and Austrian business economic cycles. The paper examines the specific case of massive intervention by governments and, especially, central banks in monetary and financial markets to deal with the pandemic trying to mitigate its negative effects. The paper offers a critical analysis of government tax policies and the increase in public spending, considered as the panacea and universal remedy for the social troubles. This review concludes with a proposal to change the mainstream paradigm, thereby proposing a more sustainable and wellbeing economics.

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“…However, the case for a flexible money supply through the issuing of fiduciary media-whether under central or free banking-is extremely weak. (Bagus and Howden 2011) Arguably the case for "elastic" or "flexible" money is inexistent. (Schlichter 2011) However, this does not mean that the RPE approach does not yield any valuable insights, only that this particular benchmark is not the right one.…”

Section: Austrian (Praxeological) Critique Of the Constitutional Econmentioning

confidence: 99%

Monetary Constitutionalism: Some Recent Developments

Hauwe

2017

SSRN Journal

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The volume edited by Leland Yeager more than 50 years ago and published in 1962 under the title In Search of a Monetary Constitution has turned out to be remarkably prescient since the Great Inflation was then about to begin. One might expect that in the wake of the Global Financial Crisis and Great Recession interest in monetary-constitutional matters would be revived and this has indeed been the case. In this paper an attempt is made to assess whether and to what extent scientific progress has been made in defining the nature and characteristics of a monetary constitution for the post-Crisis world. To that end some recent contributions to the literature are reviewed critically. IntroductionDespite some contributions to the economic literature that have acknowledged the role of central banks in the financial crisis and how these institutions have contributed to the Great Recession and the meager recovery thereafter (see e.g. Hetzel 2012), most economists have been more interested in analyzing the technical role that monetary policy played during and after the crisis, thus taking the existent framework as given, than in considering and addressing alternative frameworks for monetary policy. Some economists have not only been supporters of the current hypothetically optimal monetary framework but have even argued in favor of further enhancements on central bankers' discretionary powers. Several economists such as Nobel Prize winners Buchanan, Friedman and Hayek, however, had addressed the technicalities of monetary policy within the context of broader political economy concerns. Their proposals should be situated within the more general framework of institutional and constitutional reforms of the rules of the "monetary policy game". It is in the tradition of these contributions that we review some recent contributions without being exhaustive. The aim is to raise questions and to stimulate the intellectual debate rather than to provide conclusive answers. The Yeager 1962 volume and afterLeland Yeager's decision more than 50 years ago to organize a lecture series and the resulting volume on monetary constitutions (Yeager 1962) has turned out to be unusually prescient. It has been suggested that much damage might have been avoided if the world had listened to the message of the Yeager volume and subjected its central banks to the restrictions of a monetary constitution in the 1960s. (Rockoff 2015) In the aftermath of the 3 Global Financial Crisis one would expect thoughtful discussion of monetary constitutions to resume and this has indeed been the case. In this paper we will review some recent contributions to this debate and try to assess if, and to what extent, scientific progress has been made in the search for a monetary constitution. "A great deal of contemporary monetary scholarship (…) has concentrated on piecemeal and detailed study of our existing monetary structure and its performance. (…) The reforms proposed have generally been correspondingly minor. Meritorious though this detailed work has be...

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Monetary equilibrium and price stickiness: Causes, consequences and remedies

Cited by 15 publications

References 25 publications

Monetary equilibrium and price stickiness: A rejoinder

Monetary equilibrium and price stickiness: A rejoinder

Principles of Monetary & Financial Sustainability and Wellbeing in a Post-COVID-19 World: The Crisis and Its Management

Monetary Constitutionalism: Some Recent Developments

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