As austerity policies are unpopular with voters and high debt levels are a drag on growth, several economists, most famously Carmen Reinhart and Kenneth Rogoff, have suggested that governments might have to consider an extra dose of financial repression as a way out of the low growth-high debt...

The paper describes boom-and-bust cycles in a Hayekian framework. Therefore, we introduce Hayek's notion of order in an economy. A high degree of order allows market participants to form correct expectations and plans. We argue that displacements, such as real or financial innovations or...

As austerity policies are unpopular with voters and high levels of debt are a drag on growth a number of economists, most famously C. Reinhart and K. Rogoff, suggest that governments might have to consider financial repression as way out of the debt trap. We maintain that an exit from financial...

The business cycles theories of Wicksell (1898), Schumpeter (1912), Mises (1912), Hayek (1929, 1935) and Minsky (1986, 1992) explain business cycles by distorted prices on capital markets, buoyant credit expansion and overinvestment. The exuberance during the boom endogenously causes the...

The paper describes boom-and-bust cycles within Hayek’s framework of order and aims to provide an understanding of recurring crises in recent financial history. We argue that a boom-and-bust cycle is initiated by a displacement that lowers the degree of (ex-post) plan coherence (or order) in...

The paper analyses adverse investment, growth and distributional effects of ultra-loose monetary policies based on the monetary overinvestment theories of Hayek and Mises. We argue that ultra-loose monetary policies create incentives to substitute real investment by financial investment. When...