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

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  • 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?," Post-Print hal-01349787, HAL.
    • Handle: RePEc:hal:journl: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
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    References listed on IDEAS

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    Cited by:

    1. Gerasimos T. Soldatos & Erotokritos Varelas, 2023. "Are Banks Too Many? A Theoretical Possibility and a Policy Issue," Journal of Economic Analysis, Anser Press, vol. 2(1), pages 36-52, February.
    2. 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.

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