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Monetární teorie cyklu, dluhový problém a finanční krize
[Monetary Cycle Theory, Debt Problem and Financial Crises]

Author

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  • Pavel Dvořák

Abstract

In attempts to explain the mechanism of a financial crisis of the third generation, the basic problem is to specify the basic causes of its emergence. In the text of the paper we have formulated a hypothesis saying that the basic cause of the emergence of a systemic financial crisis of the Asian type is an overall unsound indebtedness, initiated - using the terminology of a monetary theory of cycles - by malinvestment, caused by an excessive credit boom. If these investments are financed through credits, their systematic liquidation leads not only to recession, but also to the development of unsound indebtedness and to a massive credit non-reimbursement. If the credits are granted in the local currency, there develops an internal debt problem, a banking crisis and subsequently a monetary crisis. If the credits are given in foreign currencies, there develops an external debt problem, a monetary crisis and subsequently a banking crisis. Debt, banking and monetary problems are mutually amplified and lead to the emergence of a systemic financial crisis.

Suggested Citation

  • Pavel Dvořák, 2007. "Monetární teorie cyklu, dluhový problém a finanční krize [Monetary Cycle Theory, Debt Problem and Financial Crises]," Politická ekonomie, Prague University of Economics and Business, vol. 2007(2), pages 183-205.
    • Handle: RePEc:prg:jnlpol:v:2007:y:2007:i:2:id:596:p:183-205
    DOI: 10.18267/j.polek.596
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    References listed on IDEAS

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    More about this item

    Keywords

    systemic financial crisis; monetary theory of business cycles; malinvestment; credit boom; debt problem;
    All these keywords.

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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