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The paper identifies based on the monetary overinvestment theories by Wicksell (1898), Mises (1912) and Hayek (1929) monetary policy mistakes in large industrial countries issuing international currencies. It its argued that a neglect towards monetary policy reform in a world dominated by...
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persistent growth in asset demand. We show theoretically that dynamic interactions between elastic credit supply (due to … leveraged borrowing) and persistent credit demand (due to consumption habit) can generate a multiplier-accelerator mechanism … are consistent with the basic features of investment booms and the consequent asset-market crashes led by excessive credit …
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By the end of 2013, the share of government debt held by the domestic banking sectors of Eurozone countries was more than twice its 2007 level. We show that this type of increasing reliance on the domestic banking sector for absorbing government bonds generates a crowding out of corporate...
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