Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149266
Authors: 
Schnabl, Gunther
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 6179
Abstract: 
The paper analyses the evolvement and effects of central bank crisis management since the mid 1980s based on a Hayek-Mises-Wicksell overinvestment framework. It is shown that, given that the traditional transmission mechanism between monetary policy and consumer price inflation has collapsed, asymmetric monetary policy crisis management implies a convergence of interest rates towards zero and a gradual expansion of central bank balance sheets. From a Hayek-Mises-Wicksell perspective asymmetric central bank crisis management has contributed to financial market bubbles, decreasing marginal efficiency of investment, increasing income inequality and declining growth dynamics. The economic policy implication is a slow but decisive exit from ultra-expansionary monetary policies.
Subjects: 
Hayek
Mises
Wicksell
monetary overinvestment theory
asymmetric monetary policy
financial crisis
Goodhart’s Law
marginal productivity of investment
secular stagnation
JEL: 
E52
E58
F42
E63
Document Type: 
Working Paper

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