Money, Bank Credit, and Economic Cycles - The Ludwig von Mises ...

PREFACE TO THETHIRD ENGLISH EDITIONThe three years since the publication of the previous Englishedition of Money, Bank Credit, and Economic Cycleshave seen a continuation of the economic recessionprocess set in motion after the 2007 financial crisis. Thisprocess has consisted of the inevitable microeconomic readjustmentand realignment of a real productive structure whichthe credit expansion of the prior “speculative bubble” yearshad rendered unsustainable. Though governments’ fiscal andmonetary policies have on many occasions been erratic andcounterproductive, in the end, enormous growth in publicdeficits has brought on a sovereign public debt crisis in internationalmarkets. This crisis has been so severe that one byone, the different governments have been forced to take measures,even if timid ones, in the right direction, measures toreduce public spending, interventionism, and regulation ofthe economy, and to liberalize factor markets and make themmore flexible, especially the labor market.With this in mind, we must consider the situation of thosecountries, like Spain, which for the first time in their historyhave had to face a profound economic crisis without the abilityto implement monetary policy on their own, as they nowbelong to the European Monetary Union. For these countries,the euro has played a role similar to that once played by thegold standard: it has put an end to monetary nationalism andto the possibility of reacting to a crisis by expanding themoney supply, depreciating or devaluing the currency, andpostponing indefinitely the necessary structural, austerityxvii