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Please use this identifier to cite or link to this item: http://hdl.handle.net/10077/5225

Title: Crash and Carry: Financial Intermediaries, the Intertemporal-Carry Trade, and Austrian Business Cycles
Authors: Barnett II, William
Block, Walter E.
Keywords: Austrian economics
Misallocation of resources
Monetary system
Issue Date: 2009
Publisher: EUT Edizioni Università di Trieste
Citation: William Barnett II and Walter E. Block, "Crash and Carry: Financial Intermediaries, the Intertemporal-Carry Trade, and Austrian Business Cycles", in: Etica & Politica / Ethics & Politics, XI (2009) 1, pp. 455-469.
Series/Report no.: Etica & Politica / Ethics & Politics
XI (2009) 1
Abstract: Barnett and Block (2008) establish that not only are fractional reserve demand deposits fraudulent and create an Austrian Business Cycle (ABC), but that a certain type of mismatching between time deposits and the period for which the depository institution relends the deposited funds (banks or other financial intermediaries “borrowing short and lending long”) are also contrary to libertarian law. The question we address in the present paper is whether or not this type of disconnect between the period for which the ultimate lender committed funds and the ultimate borrower gained possession thereof also necessarily start an Austrian Business Cycle. Even though this does not constitute an increase in the stock of money, we answer in the affirmative.
URI: http://hdl.handle.net/10077/5225
ISSN: 1825-5167
Appears in Collections:Etica & Politica / Ethics & Politics (2009) XI/1

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