Austrian Economics and the Financial Crisis of 2008
This article analyses where Austrian Economics find the origin of the current financial crisis and what will be done if economists adhered to Austrian economics. Previous research shows that there exists an argument by Austrian Economists of having theories that predicted the crisis and solutions that are fundamental in curbing the crisis. Due to the criticism from mainstream economists, however, this article shifts focus by instead analysing the existing literature and the credibility of both the Austrian economics and neoclassical economics. The approach taken is critical analysis of the existing theories from both groups of economists. The results showed that neither side is wrong in their argument but there exists a significant correlation between the two groups of economists. The conclusion is that Austrian economists have a stronger argumentative point since most of their theories are fine reviews of the mainstream economics. This paper implies the need for integration of the two economic sides and provides the researchers and readers with a detailed view of the Austrian economics in relation to the financial crisis. It goes further in providing the relevance of the integration of Austrian and mainstream economics.
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- Carmen M. Reinhart & Kenneth S. Rogoff, 2009.
"The Aftermath of Financial Crises,"
American Economic Review,
American Economic Association, vol. 99(2), pages 466-472, May.
- Reinhart, Carmen & Rogoff, Kenneth, 2008.
"Las secuelas de las crisis financieras
[The aftermath of financial crisis]," MPRA Paper 13695, University Library of Munich, Germany.
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- James Crotty, 2008. "Structural Causes of the Global Financial Crisis: A Critical Assessment of the ‘New Financial Architecture’," Working Papers wp180, Political Economy Research Institute, University of Massachusetts at Amherst.
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- Reinhart, Carmen & Rogoff, Kenneth, 2008. "Las secuelas de las crisis financieras