Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92912
Authors: 
Detzer, Daniel
Herr, Hansjörg
Year of Publication: 
2014
Series/Report no.: 
Working Paper, Institute for International Political Economy Berlin 32/2014
Abstract: 
This paper analyses financial crises from a theoretical point of view. For this it reviews what different schools of economic thought have to say about financial crises. It examines first the approaches that regard financial crises as a disturbing factor of a generally stable real economy (Wicksell, Hayek, Schumpeter, Fisher, and the early Keynes). Thereafter, approaches, where the dichotomy between the monetary and the real sphere is lifted, are reviewed. Here in particular the later works of Keynes and the contributions of Minsky are of importance. Lastly, it is looked at the behavioural finance approaches. After having reviewed the different approaches, it is examined where those approaches have similarities and where they can be combined fruitfully. Based on this, we develop an own theoretical framework methodologically based on a Wicksellian cumulative process, however, overcoming the neoclassical dichotomy. The paper ends with some policy recommendations based on the developed theoretical framework.
Subjects: 
financial crisis
crisis theory
behavioral finance
Hayek
Keynes
Minsky
Schumpeter
Wicksell
JEL: 
E03
E12
E13
G01
Document Type: 
Working Paper

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