tailieunhanh - THE CAUSES OF THE ECONOMIC CRISIS phần 7

Đó chắc chắn là đáng tiếc rằng mục tiêu này xứng đáng không thể đạt được, ít nhất là tuyến đường này. Những điều này và tương tự như những nỗ lực thường được công nhận với sự cảm thông bởi nhiều người nhận ra sai lầm của họ và unworkability của họ. | Monetary Stabilization and Cyclical Policy 113 borrow. Then also they must discriminate among the many applicants for credit. Not all enterprises can afford this increased interest rate. Those which cannot run into difficulties. 7. A Habit-forming Policy Now in extending circulation credit the banks do not proceed by pumping a limited dosage of new fiduciary media into circulation and then stop. They expand the fiduciary media continuously for some time sending so to speak after the first offering a second third fourth and so on. They do not simply undercut the natural interest rate once and then adjust promptly to the new situation. instead they continue the practice of making loans below the natural interest rate for some time. To be sure the increasing volume of demands on them for credit may cause them to raise the money rate of interest. Yet even if the banks revert to the former natural rate the rate which prevailed before their credit expansion affected the market they still lag behind the rate which would now exist on the market if they were not continuing to expand credit. This is because a positive price premium must now be included in the new natural rate. With the help of this new quantity of fiduciary media the banks now take care of the businessman s intensified demand for credit. Thus the crisis does not appear yet. The enterprises using more roundabout methods of production which have been started are continued. Because prices rise still further the earlier calculations of the entrepreneurs are realized. They make profits. in short the boom continues. 8. The Inevitable Crisis and Cycle The crisis breaks out only when the banks alter their conduct to the extent that they discontinue issuing any more new fiduciary media and stop undercutting the natural interest rate. They may even take steps to restrict circulation credit. When they actually do this and why is still to be examined. First of all however we must ask ourselves whether it is possible for