June 2, 2011

Beginning, crises, and end of the money economy {06}

Working paper at SSRN

Abstract  A crisis is but a crisis when the long-run outlook is definitively positive. Then a lower turning point must exist. This implicates a vision or, in the ideal case, a formalized theory of the money economy's possible end states. This theory has to provide an endogenous explanation of end states and crises. The equilibrium approach excludes endogenous causes in principle. Thus disturbances can only be explained by exogenous random shocks. The structural axiomatic approach, which is applied in the following, consistently defines the potential systemic crisis point and the conditions of an economic happy end.