Hayek’s Work Helps Explain the Link between Ultra-loose Monetary Policy and Political Instability

by Gunther Schnabl

The European Central Bank will increase the overall volume of its bond purchase program to 2,550,000,000,000 euros by September 2018. The main refinancing rate will remain at zero. Mario Draghi has stressed that this policy shall continue until inflation picks up sustainably (which is unlikely to happen in the foreseeable future). The works of Friedrich August von Hayek (1931, 1944, 1976) help to explain why the tremendous monetary expansion is increasingly causing growing economic and political instability in Europe.

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Planning and Democracy

by Mario Rizzo



The Senate could not agree on an auto bailout package. So what may happen now? The Treasury may lend the Big Three about $15 billion under the authority given to it in the TARP legislation to buy any financial instrument necessary to promote financial market stability. This authority was thus not to do any specific thing but to do what in the judgment of Henry Paulson would help fix the system. So Congress basically gave the Fixer an almost blank check. Continue reading