WORLD ECONOMIC CRISIS AS A MONETARY PHENOMENON

Abstract

An expansionary monetary stance since the middle of 1990s is considered as the
fundamental factor behind a series of consequent bubbles ─ on the stocks of a group
of new Internet-based companies (1995─2000), real estate (2003─2004) and com-
modities markets (2006─2007). Specific transmission channels of the Fed monetary
policy which led to the real estate market boom-bust cycle and ultimately to the 2008
world financial crisis are analyzed. Other factors, as the lack of proper regulation
or the widespread use of innovative financial instruments, have been of much less
importance.