The Federal Reserve regulates U.S. commercial banks using a system of risk-based capital (RBC) regulations based on the Basel Accords. Unfortunately, the Fed’s mis-rating of several assets such as mortgage-backed securities encouraged the build-up of these assets in the banking system and was...

The Federal Reserve regulates U.S. commercial banks using a system of risk-based capital (RBC) regulations based on the Basel Accords. Unfortunately, the Fed's misrating of several assets such as mortgage-backed securities encouraged the build-up of these assets in the banking system and was a...

The business cycle theory of Friedrich A. Hayek offers an explanation for the onset of the Great Depression that is more complete than those of his contemporaries, including Gustav Cassel. Hayek sought to explain why the boom of the 1920s ended in the bust of 1929. In the 1930s, Hayek's theory...

We revisit the origins of the Great Depression by contrasting the accounts of two contemporary economists, Friedrich A. Hayek and Gustav Cassel. Their distinct theories highlight important, but often unacknowledged, differences between the international depression and the Great Depression in the...