Financial Effects of Monetary Expansions
DOI:
https://doi.org/10.52195/pm.v15i1.61Abstract
The Austrian Business Cycle Theory (ABCT) has traditionally been focused on the distortions created by monetary expansions on the productive structure of the economy. In this paper, I will try to show that, if central banks increase the monetary base and the agents’ preferences do not change, the dis- tortions will not be limited to the productive structure but will also affect the financial structure. This will lead to a series of financial cycles in which both bubbles and crashes, the financial counterparts of booms and crisis, will take place.
Keywords: Bubbles, Business Cycles, Financial Assets, Financial Crisis.
JEL Classification: E14, E32, E44, G01.
Resumen: La Teoría Austriaca del Ciclo Económico (TACE) se ha centrado tra- dicionalmente en las distorsiones generadas por las expansiones monetarias en la estructura productiva de la economía. En este artículo, se intenta mostrar que, si los bancos centrales aumentan la base monetaria y las preferencias de los agentes se mantienen sin cambios, las distorsiones no se limitarán a la estructura productiva sino que también afectarán a la estructura financiera. Esto conducirá a una serie de ciclos financieros en los que burbujas y crashes, los equivalentes financieros de auges y crisis, tendrán lugar.
Palabras clave: Burbujas, Ciclos Económicos, Activos Financieros, Crisis Finan- cieras.
Clasificación JEL: E14, E32, E44, G01.
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