Incentives for debt and the impact on economic stability

2012

Masteroppgave i økonomi og administrasjon - Universitetet i Agder 2012 The global financial crisis came as a surprise for many economists, governments and populations around the world. Most economists relied on models of how the economy functions which did not have the capability to produce or predict breakdowns and crises, because long term stability was taken for granted and short term deviations were expected to largely resolve themselves by the normal functioning of free markets. However, other economists have developed theories and models which predict that excessive economic fluctuations with the potential for breakdowns can occur. This thesis describes and contrasts two of these theo…