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Financial Market Crisis as a Phenomenon of Stock Market Overshooting. A Theoretical Analysis


  • Fritz Breuss



An overly expansionary monetary policy stance (particularly in the USA) fuelled speculation on stock markets; when the bubble burst, economies fell into recession. These mechanisms are explained in a theoretical model with three inter-acting markets for money, equities and goods.

Suggested Citation

  • Fritz Breuss, 2010. "Financial Market Crisis as a Phenomenon of Stock Market Overshooting. A Theoretical Analysis," Austrian Economic Quarterly, WIFO, vol. 15(1), pages 78-85, April.
  • Handle: RePEc:wfo:wquart:y:2010:i:1:p:78-85

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    References listed on IDEAS

    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters,in: This Time Is Different: Eight Centuries of Financial Folly Princeton University Press.
    2. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1, January.
    3. Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
    4. John B. Taylor, 2009. "The Financial Crisis and the Policy Responses: An Empirical Analysis of What Went Wrong," NBER Working Papers 14631, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Balcilar, Mehmet & Kutan, Ali M. & Yaya, Mehmet E., 2017. "Testing the dependency theory on small island economies: The case of Cyprus," Economic Modelling, Elsevier, vol. 61(C), pages 1-11.

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    Financial Market Crisis; Overshooting; Analysis;


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