
Pocket watch on one hundred dollar bill, studio shot — Image by © Tetra Images/Corbis
John E. Charalambakis Ph.D., Chief Economist 
Richard Koo has been known as the father of the “balance sheet recession” theory. The essence of his theory states that monetary policy becomes ineffective when interest rates drop to almost zero, and thus government spending (fiscal policy) can only rebalance the economy. One of the problems with this theory is the fact that government spending is also a culprit in the crisis we recently experienced and the incomprehensible unfunded liabilities that we are facing may soon bring us to the reality described by Stephen D. King in his book When Money Runs Out.
Continue reading …
The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.
We are glad you do! Please consider donating if you want to read more articles like this one.
Comment
|
January 13th, 2014
Balance Sheet Recession Reconsidered: Rebalancing Acts at a Time of Crisis
John E. Charalambakis Ph.D., Chief Economist Richard Koo has […]
Pocket watch on one hundred dollar bill, studio shot — Image by © Tetra Images/Corbis
John E. Charalambakis Ph.D., Chief Economist
Richard Koo has been known as the father of the “balance sheet recession” theory. The essence of his theory states that monetary policy becomes ineffective when interest rates drop to almost zero, and thus government spending (fiscal policy) can only rebalance the economy. One of the problems with this theory is the fact that government spending is also a culprit in the crisis we recently experienced and the incomprehensible unfunded liabilities that we are facing may soon bring us to the reality described by Stephen D. King in his book When Money Runs Out.
Continue reading …
Author
View all posts
The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.
Do you like the article?
We are glad you do! Please consider donating if you want to read more articles like this one.
Related
Comment
Net Neutrality: Triumph of the Ruling Class
March 2nd, 2015
Comment
Russisches Roulette
March 10th, 2014
Comment
Moving Money Around Won’t Make Us Richer
January 30th, 2015
Comment
Another Year Near Zero
February 1st, 2019
Comment
Must-Read Book of 2014
August 26th, 2014