The unintended consequences of easy money: How access to finance impedes entrepreneurship

This paper investigates the manner in which economic policy promotes entrepreneurship, and how this relates to the monetary sources of the business cycle. Whilst access to finance is commonly seen as a crucial means to generate economic growth, efforts to expand the money supply beyond the stock of...

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Bibliographic Details
Published inThe Review of Austrian economics Vol. 29; no. 3; pp. 233 - 252
Main Author Evans, Anthony J.
Format Journal Article
LanguageEnglish
Published New York Springer US 01.09.2016
Springer Nature B.V
Subjects
Adverse selection
Area planning & development
Budget deficits
Business cycles
Economic crisis
Economic growth
Economic policy
Economic theory
Economics
Economics and Finance
Entrepreneurs
Entrepreneurship
History of Economic Thought/Methodology
Interest rates
Macroeconomics
Monetary policy
Moral hazard
Political Science
Public Finance
Public policy
Recessions
Small & medium sized enterprises-SME
Studies
Regions
EIF
Austrian school
Entrepreneurship
SMEs
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Summary:This paper investigates the manner in which economic policy promotes entrepreneurship, and how this relates to the monetary sources of the business cycle. Whilst access to finance is commonly seen as a crucial means to generate economic growth, efforts to expand the money supply beyond the stock of real savings leads to systemic crises. Therefore the admirable policy goal of promoting more credit for entrepreneurs—whether through access to finance, SME support or regional development—can lead to negative unintended consequences.
ISSN:0889-3047
1573-7128
DOI:10.1007/s11138-015-0322-z