IDEAS home Printed from https://ideas.repec.org/p/hal/cesptp/hal-01349787.html
   My bibliography  Save this paper

Financial Fragility and Central Bank: Are Minsky’s Crisis and Austrian Business Cycle are Complementary?

Author

Listed:
  • François Facchini

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This article explains why Minsky's post-keynesian explanation tells only one side of the crisis' story. Indeed, the financial fragility of markets explains mainly the activity of Central bank i.e. the lender of last resort which increases the moral hazard phenomena and the socialization of risks. The regulated capitalism is, in this perspective, the cause of market instability and financial fragility. Indeed, moral hazard encourages commercial banks to take risks. In that respect, the economic policies implemented to manage the crisis of 2008 are inadequate.

Suggested Citation

  • François Facchini, 2015. "Financial Fragility and Central Bank: Are Minsky’s Crisis and Austrian Business Cycle are Complementary?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01349787, HAL.
    • Handle: RePEc:hal:cesptp:hal-01349787
    DOI: 10.6000/1929-7092.2015.04.21
    Note: View the original document on HAL open archive server: https://hal.science/hal-01349787
    as

    Download full text from publisher

    File URL: https://hal.science/hal-01349787/document
    Download Restriction: no
    File URL: https://libkey.io/10.6000/1929-7092.2015.04.21?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lawrence H. White, 2015. "Skepticism About Minsky's Financial Instability Hypothesis: A Comment on Flanders," Econ Journal Watch, Econ Journal Watch, vol. 12(1), pages 106-113, January.
    2. Steve N. Robinson & Derrick P. Nantz, 2009. "Lessons To Be Learned From The Financial Crisis," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 25(Fall 2009), pages 5-22.
    3. Christophe Blot & Jérôme Creel & Christine Rifflart & Danielle Schweisguth, 2009. "Petit manuel de stratégies de sortie de crise. Comment rebondir pour éviter l'enlisement ?," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(3), pages 335-381.
    4. Catherine Mathieu & Henri Sterdyniak, 2009. "La globalisation financière en crise," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(3), pages 13-73.
    5. David Prychitko, 2010. "Competing explanations of the Minsky moment: The financial instability hypothesis in light of Austrian theory," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 23(3), pages 199-221, September.
    6. Facchini, François & Melki, Mickaël, 2013. "Efficient government size: France in the 20th century," European Journal of Political Economy, Elsevier, vol. 31(C), pages 1-14.
    7. Facchini, François & Melki, Mickaël, 2013. "Efficient government size: France in the 20th century," European Journal of Political Economy, Elsevier, vol. 31(C), pages 1-14.
    8. repec:hal:spmain:info:hdl:2441/5l6uh8ogmqildh09h84aj549j is not listed on IDEAS
    9. repec:dau:papers:123456789/4777 is not listed on IDEAS
    10. Carilli, Anthony M & Dempster, Gregory M, 2001. "Expectations in Austrian Business Cycle Theory: An Application of the Prisoner's Dilemma," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 14(4), pages 319-330, December.
    11. François Facchini & Mickaël Melki, 2011. "Optimal Government Size and Economic Growth in France (1871-2008): An explanation by the State and Market Failures," Documents de travail du Centre d'Economie de la Sorbonne 11077, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    12. repec:hal:spmain:info:hdl:2441/5l6uh8ogmqildh09h4u97b51i is not listed on IDEAS
    13. repec:dau:papers:123456789/3735 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Facchini François, 2016. "The Hayek-Keynes Macro Debate Continues," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 22(1), pages 1-13, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. François Facchini, 2015. "Financial Fragility and Central Bank: Are Minsky’s Crisis and Austrian Business Cycle are Complementary?," Post-Print hal-01349787, HAL.
    2. Facchini, François, 2014. "Retour sur la crise et les politiques mises en œuvre : une perspective autrichienne [Past and Future of the crisis]," MPRA Paper 52984, University Library of Munich, Germany.
    3. Sabrina Auci & Laura Castellucci & Manuela Coromaldi, 2021. "How does public spending affect technical efficiency? Some evidence from 15 European countries," Bulletin of Economic Research, Wiley Blackwell, vol. 73(1), pages 108-130, January.
    4. Ant—nio Afonso & Ludger Schuknecht & Vito Tanzi, 2023. "The size of government," Chapters, in: António Afonso & João Tovar Jalles & Ana Venâncio (ed.), Handbook on Public Sector Efficiency, chapter 1, pages 6-31, Edward Elgar Publishing.
    5. Suleyman Kasal, 2023. "Analysing The Armey Curve Based On The Fourier Cointegration Approach For Turkey," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 68(236), pages 139-158, January –.
    6. Facchini, Francois & Couvreur, Stéphane, 2015. "Inequality: The original economic sin of capitalism? An Evaluation of Thomas Piketty's "Capital in the twenty-first century"," European Journal of Political Economy, Elsevier, vol. 39(C), pages 281-287.
    7. François Facchini & Elena Seghezza, 2021. "Legislative production and public spending in France," Public Choice, Springer, vol. 189(1), pages 71-91, October.
    8. Maiga Nouhoun Oumarou & Sirpe Gnanderman, 2023. "Optimal size of public expenditure in the countries of the West African Economic and Monetary Union (WAEMU)," Economics Bulletin, AccessEcon, vol. 43(1), pages 146-160.
    9. Philip Arestis & Hüseyin Şen & Ayşe Kaya, 2021. "On the linkage between government expenditure and output: empirics of the Keynesian view versus Wagner’s law," Economic Change and Restructuring, Springer, vol. 54(2), pages 265-303, May.
    10. François Facchini & Mickael Melki, 2014. "Political Ideology And Economic Growth: Evidence From The French Democracy," Economic Inquiry, Western Economic Association International, vol. 52(4), pages 1408-1426, October.
    11. Luc Désiré Omgba & Désiré Avom & Dieudonné Mignamissi, 2021. "Cabinet size, power-sharing and ethnic exclusion in Africa," Economics of Governance, Springer, vol. 22(1), pages 47-64, March.
    12. Alina Cristina Nuta & Florian Marcel Nuta & Viorica Chirila & Angela Roman & Andy Corneliu Pusca, 2015. "Testing the Relationship between Public Expenditure and Economic Growth in Romania," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 11(4), pages 86-102, August.
    13. Petar Stankov, 2017. "Economic Freedom and Welfare Before and After the Crisis," Springer Books, Springer, number 978-3-319-62497-6, September.
    14. Marco Gallegati & Massimo Tamberi, 2022. "Long swings in the growth of government expenditure: an international historical perspective," Public Choice, Springer, vol. 192(3), pages 227-248, September.
    15. Gabriel Villa & Sebastián Lozano, 2016. "DEA with non-monotonic variables. Application to EU governments’ macroeconomic efficiency," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 67(12), pages 1510-1523, December.
    16. Niclas Berggren & Christian Bjørnskov & David Lipka, 2015. "Legitimacy and the cost of government," Public Choice, Springer, vol. 162(3), pages 307-328, March.
    17. Facchini François, 2016. "The Hayek-Keynes Macro Debate Continues," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 22(1), pages 1-13, July.
    18. Waqar Wadho & Umair Ayaz, 2018. "Government size and economic growth in an endogenous growth model with rent†seeking," Economics and Politics, Wiley Blackwell, vol. 30(1), pages 151-179, March.
    19. Doré, Natalia I. & Teixeira, Aurora A.C., 2023. "The role of human capital, structural change, and institutional quality on Brazil's economic growth over the last two hundred years (1822–2019)," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 1-12.
    20. Taner Turan, 2014. "Optimal Size of Government in Turkey," International Journal of Economics and Financial Issues, Econjournals, vol. 4(2), pages 286-294.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:hal-01349787. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.