22 Pages Posted: 28 Oct 2015 Last revised: 19 Nov 2015
Date Written: October 27, 2015
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: 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