We show how since the mid 1980s expansionary monetary policies in the large economies and vagabonding liquidity have contributed to bubbles in the new and emerging markets. Based on the monetary overinvestment theories of Hayek and Wicksell we describe a wave of bubbles and crises that was...

Building upon the Austrian over investment theory it is argued that credit and asset market booms have emerged during phases of buoyant liquidity supply since the 1980s. We argue that major central banks have tended to lower interest rates too much for too long when bubbles burst and panic...

The paper explains internationally transmitted boom-and-bust cycles as the outcome of excessive liquidity supply based on the credit boom theories of Hayek (1929; 937), Mises (1912) and Minsky (1986). We show how too expansionary monetary policies cause distortions in the economic structure and...

<heading id="h1" level="1" implicit="yes" format="display">Abstract</heading> 'Capitalism without failure is like religion without sin'. Charles Kindleberger's book Manias, Panics and Crashes points out that speculation and crises have always been present: the world economic crisis of the 20th century, the South Sea bubble in the 18th century, and the tulip mania...

Die Ungleichgewichte auf den internationalen Finanzmärkten werden von den Finanzministern und Notenbankchefs der Industrieländer mit zunehmendem Unbehagen betrachtet. In Hinblick auf Hedge-Fonds soll bis zum G-8-Gipfel im Juni dieses Jahres ein Verhaltenskodex erarbeitet werden. Inwieweit...

This paper explores the link between monetary policies of large industrial countries and international credit cycles. Based on an overinvestment framework, we show that in the prevailing asymmetric world monetary system, monetary policies of large centre countries can fuel credit booms in...

We test for the impact of exchange rate volatility on growth in emerging market economies based on the theory of optimum currency areas. Our findings provide evidence for a positive impact of exchange rate stability on growth.

We show how since the mid 1980s expansionary monetary policies in the large economies and “vagabonding liquidity” have contributed to bubbles in the new and emerging markets. Based on the monetary overinvestment theories of Hayek and Wicksell we describe a wave of bubbles and crises that was...