IDEAS home Printed from https://ideas.repec.org/a/aft/journl/v1722020janjunp190-217.html
   My bibliography  Save this article

The Austrian Approach To The Economic Cycle

Author

Listed:
  • José Henrique Bassi Souza Sperancini

    (Universidade Federal do ABC (UFABC))

  • Paulo Pio Dantas

    (Contadoria e Auditoria-Geral do Estado (Cage))

Abstract

The Austrian economic theory approach, which we will summarize, questions the state’s ability to improve the results of economic activity. The objective is to present as didactic as possible a modeling that offers great applicability to studies of economic crises resulting from strong state interventions in economic activity. The theory identifies in credit market manipulation the source of the distortions that give rise to the economic cycle. The expansion of bank credit without a prior increase in savings leads to an artificial reduction in interest rates. With the additional volume of lower interest credit, entrepreneurs embark on overly ambitious and unsustainable long-term projects. The result is always a crisis or a reduction in the potential economic growth rate.

Suggested Citation

  • José Henrique Bassi Souza Sperancini & Paulo Pio Dantas, 2020. "The Austrian Approach To The Economic Cycle," Revista de Economia Mackenzie (REM), Mackenzie Presbyterian University, Social and Applied Sciences Center, vol. 17(1), pages 190-217, January-J.
    • Handle: RePEc:aft:journl:v:17:2:2020:jan:jun:p:190-217
    DOI: 105935/1808-2785/rem.v17n1p.190-217
    as

    Download full text from publisher

    File URL: http://editorarevistas.mackenzie.br/index.php/rem/article/view/13144
    Download Restriction: no
    File URL: https://libkey.io/105935/1808-2785/rem.v17n1p.190-217?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
    ---><---

    More about this item

    Keywords

    Austrian school; credit; economic cycle; economic theory; modeling.;
    All these keywords.

    JEL classification:

    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School

    Statistics

    Access and download statistics

    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:aft:journl:v:17:2:2020:jan:jun:p:190-217. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Instituto Presbiteriano Mackenzie (IPM) (email available below). General contact details of provider: https://edirc.repec.org/data/fcmacbr.html .

    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.