Abstract

https://ssrn.com/abstract=2616057
 


 



Boom, Bust, and Bubbles: A Mengerian Account


Cameron Harwick


George Mason University - Department of Economics

December 15, 2015

GMU Working Paper in Economics No. 15-63

Abstract:     
The eclipse of capital-theoretic explanations of depressions by more straightforward monetary explanations in the decades following the Great Depression has obscured important questions that were asked by the older theory, even if it did not answer them satisfactorily. This paper offers an account of asset bubbles based in the dynamics of the asset's moneyness, or liquidity. In doing so, it subsumes both the attribution of depression to an excess demand for money (and explains how this can be true despite central banks' scrupulousness in avoiding falls in the money stock), and the observation of systematic capital misallocation over the course of the business cycle.

Number of Pages in PDF File: 19

Keywords: Business cycles, Asset bubbles, Money, Capital, Depression, Recession, Credit

JEL Classification: E32, G1, E51


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Date posted: June 10, 2015 ; Last revised: December 24, 2015

Suggested Citation

Harwick, Cameron, Boom, Bust, and Bubbles: A Mengerian Account (December 15, 2015). GMU Working Paper in Economics No. 15-63. Available at SSRN: https://ssrn.com/abstract=2616057 or http://dx.doi.org/10.2139/ssrn.2616057

Contact Information

Cameron Harwick (Contact Author)
George Mason University - Department of Economics ( email )
4400 University Drive
Fairfax, VA 22030
United States
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