Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/215749 
Year of Publication: 
2020
Series/Report no.: 
Working Paper No. 166
Publisher: 
Universität Leipzig, Wirtschaftswissenschaftliche Fakultät, Leipzig
Abstract: 
The paper analyses in light of Austrian and Keynesian economic theory the impact of conventional and unconventional monetary policies as therapies for financial crises. It compares the financial market stabilization measures of the Federal Reserve System and the European System of Central Banks in response to the US subprime crisis and the European financial and debt crisis. It is shown that the Federal Reserve System's crisis measures were more directed towards stabilizing the banking system, whereas the European Central Bank had a stronger focus on the stabilization of the debt affordability of euro area crisis countries. In both cases, household credit growth remained under control despite renewed monetary expansion, while new imbalances emerged in the corporate sector. In the euro area, loose monetary policy had a destabilizing impact on the financial sector.
Subjects: 
Financial cycles
financial crisis
financial stability
Hayek
Keynes
monetarypolicy
JEL: 
B53
E12
E14
E30
E44
E58
G10
G20
H30
H50
Document Type: 
Working Paper

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