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Why the " Miracle of Compound Interest" leads to financial crises?

Author

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  • Micheal Hudson

Abstract

In this paper I want to discuss the financial sector´s tendency to dominate, deflate and polarize economies, thwarting economic potential. Understanding these financial dynamics is essential to explain why all nations are not operating up to the technological potential toward which classical liberalism aimed, and why the world economy is polarizing, as are domestic economies even in the most advanced industrial nations.

Suggested Citation

  • Micheal Hudson, 2009. "Why the " Miracle of Compound Interest" leads to financial crises?," Ensayos de Economía 8010, Universidad Nacional de Colombia Sede Medellín.
    • Handle: RePEc:col:000418:008010
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    File URL: http://humanas.medellin.unal.edu.co/sites/default/files/ede/pdf/ede_34/ede_34_01_hudson_michael_-_why_miracle_compound_interest_leads_financial_crises.pdf
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    More about this item

    Keywords

    Increasing returns; compound rate of interest;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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