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rope2026paper_1
Journal article

A Structural Macroeconomic Analysis of Financial Bubbles

BP2-STS

  • 2026
Published in:
  • Review of Political Economy. - Informa UK Limited. - 2026, p. 1-18
Eurocurrencies
Financial bubbles
Inflation
National and international payments systems
Quantum macroeconomic analysis
English This paper focuses on the structural macroeconomic factors that lead to an extraordinary increase in liquidity feeding of financial bubbles at the national and international levels. Contrary to firmly-held beliefs among mainstream economists, these bubbles do not simply originate from agents’ behaviour, particularly speculation, but result from a disorderly functioning of current monetary systems at both the national and international levels. As a matter of fact, the domestic payments system does not distinguish on structural grounds the emission of money and the opening of credit lines by banks. This gives rise to financial bubbles insofar as banks provide credit lines for “non-GDP-based transactions”, thereby inflating the volume of bank deposits without any corresponding new production. Moreover, at the international level, financial bubbles expand because key currencies, notably the US dollar, are used as if they were a means of final settlement internationally. In reality, they are a mere promise of payment, leading to a monetary “duplication” that affects the international economy as a result of the lack of an international settlement institution providing a means of final payment for each country considered as a whole. This paper suggests therefore a structural-monetary reform to eradicate these problems before another systemic financial crisis occurs.
Faculty
Faculté des sciences économiques et sociales et du management
Department
Département d'économie politique
Language
  • English
License
CC BY-NC-ND
Open access status
green
Identifiers
Persistent URL
https://folia.unifr.ch/unifr/documents/335216
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