May, 2016
The Comparative Political Economy of a Crisis
Peter J. Boettke
Director, F. A. Hayek Program for Advanced Study in Philosophy, Politics, and EconomicsLiya Palagashvili
Senior Research Fellow

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During times of economic crises, the public policy response is to abandon basic economic thinking and engage in “emergency economic” policies. We explore how the current financial crisis was in part caused by previous emergency economic measures. We then investigate the theoretical limitations of emergency economic responses. We argue that these responses fail to take into consideration the practical conditions of politics, thereby making them unsuitable to remedy the problems of a crisis. Lastly, we provide a preliminary analysis of the consequences resulting from emergency economic policies initiated in response to the 2008 financial crisis.