QuoteProject
The 'boom-bust' cycle is generated by monetary intervention in the market, specifically bank credit expansion to business.
Murray Rothbard
ShareWTF𝕏

Interpretation

What this quote means

The boom-bust cycle is a phenomenon caused by the manipulation of money supply, particularly through bank credit, leading to economic fluctuations.

Murray Rothbard's quote highlights how monetary policies, especially those involving expansion of bank credit, can create cycles of economic prosperity (boom) followed by downturns (bust). This intervention disrupts the natural market balance, leading to periods of unsustainable growth followed by corrections that can result in economic hardship.

Themes

Boom-Bust CycleMonetary InterventionBank CreditEconomicsMarket Fluctuations

In practice

Example use cases

In a discussion on economic policies, one might refer to Rothbard's quote to illustrate the dangers of excessive credit expansion.

More from Murray Rothbard

Human life is not some sort of race or game in which each person should start from an identical mark. It is an attempt by each man to be as happy as possible. And each person could not begin from the same point, for the world has not just come into being; it is diverse and infinitely varied in its parts. The mere fact that one individual is necessarily born in a different place from someone else immediately insures that his inherited opportunity cannot be the same as his neighbor's.
Murray RothbardRead
Ultimately, there is no entity called 'government'; there are only people forming themselves into groups called 'governments' and acting in a 'governmental' manner.
Murray RothbardRead
In the market, the fittest are those most able to serve the consumers; in government, the fittest are those most adept at wielding coercion and/or those most adroit at making demagogic appeals to the voting public.
Murray RothbardRead
No one may threaten or commit violence ('aggress') against another man's person or property. Violence may be employed only against the man who commits such violence; that is, only defensively against the aggressive violence of another. In short, no violence may be employed against a non-aggressor. Here is the fundamental rule from which can be deduced the entire corpus of libertarian theory.
Murray RothbardRead
If government manages to establish paper tickets or bank credit as money, as equivalent to gold grams or ounces, then the government, as dominant money-supplier, becomes free to create money costlessly and at will. As a result, this 'inflation' of the money supply destroys the value of the dollar or pound, drives up prices, cripples economic calculation, and hobbles and seriously damages the workings of the market economy.
Murray RothbardRead
Once one concedes that a single world government is not necessary, then where does one logically stop at the permissibility of separate states? If Canada and the United States can be separate nations without being denounced as in a state of impermissible β€˜anarchy’, why may not the South secede from the United States? New York State from the Union? New York City from the state? Why may not Manhattan secede? Each neighbourhood? Each block? Each house? Each person?
Murray RothbardRead

Similar quotes

Building new roads and bridges creates jobs. Growing our exports creates jobs. Reforming our outdated tax system and our broken immigration system creates jobs.
Barack ObamaRead
Thirty years ago, many economists argued that inflation was a kind of minor inconvenience and that the cost of reducing inflation was too high a price to pay. No one would make those arguments today.
Martin FeldsteinRead
If you followed this economic crisis and you do not think that the world is getting flatter, you are not paying attention. We saw the entire global economy at one time acting totally in sync. The real truth is the world is even flatter than I thought. Our mortgage crisis is killing Deutsche Bank. You still don't think the world is flat?
Thomas FriedmanRead
Government control of the economy, no matter in whose behalf, has been the source of all the evils in our industrial society -- and the solution is laissez-faire capitalism, i.e., the abolition of any and all forms of intervention in production and trade, the separation of State and Economics, in the same way and for the same reasons as the separation of Church and State.
Ayn RandRead
The rich are always going to say that, you know, just give us more money and we'll go out and spend more and then it will all trickle down to the rest of you. But that has not worked the last 10 years, and I hope the American public is catching on.
Warren BuffettRead
Good economic theory must give the people the chance to use their talents to build their own lives. We must get away from the traditional route where the rich will do the business and the poor will depend on private or public charity.
Muhammad YunusRead

A little wisdom, now and then

Subscribe for the occasional hand-picked quote. No noise.