Crisis a Return to Rationality.docVIP

Theoretical and Applied Economics Volume XIX (2012), No. 2(567), pp. 59-68 Crisis: a Return to Rationality Liviu C?t?lin MORARU Bucharest Academy of Economi Studies Liviu.Moraru@economie.ase.ro Iulian T?NASE Bucharest Academy of Economi Studies itanase@ti Abstract. This paper analyses the causes of economic crisis trying to reconcile the theory of animal spirits with the money supply expansion. It also aims to show the limits of the two opposing theories: both of the Keynesian and the Austrian ones, and to investigate the economic crisis in Greece, focusing on the causes that triggered it. This paper also shows the effects of population, bankers and of government officials greed on economic activity in general, and the crisis in particular. Keywords: depression; Keynesianism; Austrian theory; the Greek crisis. JEL Codes: B13, D03, E12. REL Codes: 18D, 7A, 16A, 17A.  60 Liviu C?t?lin Moraru, Iulian T?nase Introduction There have been numerous economic crises in the history of mankind which were often accompanied by speculative bubbles (the tulip bubble in 1637, the stock market bubble in 1929, the bubble from the beginning of the 2000’s or, more recently, the real estate bubble in 2008). There are numerous studies regarding the nature of the causes of the economic crises, but they are strongly disputed by the economists that have different doctrines. Thus, on one side there is the Keynesian doctrine, which states that one of the major causes of the economic crises and probably the most important is the human behaviour. The human behaviour operates more on the basis of spontaneous decisions generated by an exacerbated optimism (animal spirits), and not based on the expectations generated by rigorous mathematics (Keynes, 1936, Akerlof, Shiller, 2009). On the other side, from antagonistic positions, the mon