Download this Paper Open PDF in Browser

The Comparative Political Economy of a Crisis

22 Pages Posted: 28 Oct 2015 Last revised: 19 Nov 2015

Peter J. Boettke

George Mason University - Department of Economics

Liya Palagashvili

State University of New York (SUNY) - Purchase College, Department of Economics

Date Written: October 27, 2015

Abstract

During times of economic crises, the public policy response is to abandon basic economic thinking and engage in ‘emergency economic’ policies. We explore how the current financial crisis was in part caused by previous emergency economic measures. We then investigate the theoretical limitations of emergency economic responses. We argue that these responses fail to take into consideration the practical conditions of politics, and thereby making them unsuitable to remedy the problems of a crisis. Lastly, we provide a preliminary analysis of the consequences resulting from emergency economic policies initiated in response to the 2008 financial crisis.

Keywords: Financial crisis, political economy, institutional economics, fiscal policy, monetary policy, Keynesian economic policies

JEL Classification: E30, H60, H30

Suggested Citation

Boettke, Peter J. and Palagashvili, Liya, The Comparative Political Economy of a Crisis (October 27, 2015). GMU Working Paper in Economics No. 15-53. Available at SSRN: https://ssrn.com/abstract=2681389 or http://dx.doi.org/10.2139/ssrn.2681389

Peter J. Boettke

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-1149 (Phone)
703-993-1133 (Fax)

Liya Palagashvili (Contact Author)

State University of New York (SUNY) - Purchase College, Department of Economics ( email )

735 Anderson Hill Road
Purchase, NY 10577
United States

Paper statistics

Downloads
151
Rank
165,071
Abstract Views
599