Home business insurance Money, Banking, and the Business Cycle: Volume Two Remedies and Alternative Theories
Friday 8 March 2019
Money, Banking, and the Business Cycle: Volume Two Remedies and Alternative Theories
Money, Banking, and the Business Cycle: Volume Two Remedies and Alternative Theories BY Brian P. Simpson
This is the second of two volumes on the business cycle. In a sense, the two volumes are a continuation of a previous book written titled Markets Don’t Fail! It is thought by many that business cycles especially recessions and depressions are inherent features of a free-market economy. It is claimed that a free-market economy is inherently unstable and leads to protracted periods of high unemployment and decreased eco-nomic activity. In other words, recessions, depressions, and financial crises are examples of alleged market failure. Government interference through so-called fiscal and monetary policies (among other means) is said to be needed in order to stabilize the market economy. Essentially, this means that the government must manipulate the amount of spending and impose various types of regulations on the economy to stabilize it.
The two volumes that make up this work on the business cycle show that this is not true. They demonstrate that financial crises, recessions, depressions, and the business cycle more generally are products of government interference in the market. Specifically, they are the result of government interference in the monetary and banking system. It is the government’s manipulation of the supply of money and credit through the fiat-money monetary system and fractional-reserve checking system that is responsible for the cycle today.