This is Jock Coats's Typepad Profile.
Join Typepad and start following Jock Coats's activity
Join Now!
Already a member? Sign In
Jock Coats
Recent Activity
Maybe confirmation bias on my part as a not very well-educated "Austrian" but the two precipitous falls appear to me to coincide with episodes of aggressive interest rate shunting by the central bank - in the first case over the ERM shambles and in the second when Eddie George cut rates to try and avoid a recession post dot-com. The difference between the two being that in the first case domestic borrowing for investment (i.e. in housing) went the same way as rates rose artificially high and in the second it went the opposite way as artificially depressed interest rates encouraged housing and consumer debt. Keynes's "animal spirits" can be easily explained then as would be investors left utterly confused about the disequilibrium in the loanable funds market and unable to model asset values accurately.
Toggle Commented Jun 14, 2013 on Origins of the crisis at Stumbling and Mumbling
Jock Coats is now following The Typepad Team
Jun 14, 2013