The Rollercoaster Ride to the Stationary State - Thoughts on the Current Crisis

Abstract

This Paper provides a glimpse into the current monetary processes underlying the financial predicaments on the world markets. It concludes that a type of money mismanagement is a root cause of the looming depression and that it will not go away unless such a root cause is redressed. The cause in question is a mismatch between sustainable economic growth rates that world economy can presently afford and debt-based international monetary system which requires a perennially dynamic economy for its viability. Some parallels are drawn between the XIX century Corn Law debates and banking and currency school controversies and the onset of current economic ailments, which is intriguing to view through the thought patterns of those debates. The issue whether we are close to the Stationary State in J.S. Mill sense is also analysed. As such, the paper advocates relevance of the economics mindset of the classical period in the contemporary context.