Tag Archives: Crisis & Financial Market

The 1920-1921 Depression and Recovery

Let’s recall the story. Some austrian economists (Woods, 2009; Powell, 2009; Murphy, 2009) claimed that Warren Harding cut the taxes, and by this has promoted the economic recovery. But Kuehn (2010) challenges this view. Kuehn (2012) believes that it was … Continue reading

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A growth in inequality together with growth in financial market activities : Probably not a mere coincidence

Very recently, Thomas Piketty’s new book, Capital in the Twenty–First Century, has been widely commented and has elicited a lot of reactions. Particularly in the United States. The theory (of inequality due to capital accumulation) advanced by the author is that the … Continue reading

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The Role of the Credit Rating Agencies in the U.S. Subprime Crisis : Too Much Competition ?

A known fact is that the Big Three, namely, Moody’s, Fitch Ratings, Standard & Poor’s, have provided inaccurate ratings that were obviously too generous. These CRAs (not to be confounded with Community Reinvestment Act), contamined by conflicts of interest, had … Continue reading

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The Tragedy of the Euro, by Philipp Bagus

The Tradegy of the Euro, Philipp Bagus (2008), Ludwig von Mises Institute. Chapter 4 Why High Inflation Countries Wanted the Euro Socialized Seigneuriage Some countries, especially France, made gains at the expense of the Germans due to a socialization of … Continue reading

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Myths About the so-called ‘Enron Fraud’

The Enron Scandal 2001, is generally but wrongly attributed to market failures. Specifically, audit failure and poor ratings from CRAs did not reveal Enron’s false accounting. As explained elsewhere, the conflict of interest among CRAs who purposely overrate the firms … Continue reading

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Herbert Hoover, Sticky Wages, and the Great Depression

Industrial Employment and the Policies of Herbert C. Hoover by Douglas W. MacKenzie (2010) Wages and cycles The idea that President Hoover intensified and prolonged unemployment with his high wage policy depends upon five propositions: 1. He intended to keep … Continue reading

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