Booms and Busts

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Frank Shostak

Keynesian orthodoxy claims that the cause of recessions is a decline in so-called aggregate demand. Besides confusing cause-and-effect, Keynesians don't understand that downturns are the result of malinvestments made during the boom because of central bank interference in the economy.

Frank Shostak

Milton Friedman and the Monetarists believed that fluctuations in the money supply caused the boom-and-bust business cycles. Their solution—keeping money growth slow and steady—would still lead to business cycles.

Victor Vanelli

Why do independent central banks exist in the modern economy? It was originally thought independent central banks would prevent government extravagance from creating inflation.