Why did some countries in the Euro Zone between 2010 and 2012 - until the European Central Bank stepped in - experience a dramatic vicious circle between hard austerity plans and rising default risk premia? Were such plans too small, and hence non credible, or too large, and hence non...

Starting with Wicksell and until the heyday of Keynesian economics, inflation, unemployment and business cycles were thought and taught mainly as problems originating from "saving-investment imbalances" due to some form of malfunctioning of the capital market. Whereas modern studies of imperfect...