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Bogdan GLĂVAN
Universitatea Româno-Americană
Human decisions involve a calculation of costs and benefits. Individuals respond to incentives and constraints ("negative incentives") because they change the opportunity cost of different actions that can be taken. On the free market competition coordinates entrepreneurs, connecting investment to the saving preferences of society (inter-temporal coordination), and more generally production to consumption. This coordination is achieved by means of profit and losses mechanism which, on the one hand, rewards those entrepreneurs who correctly anticipate the consumers’ desires and allocate resources towards meeting these needs and, secondly, punishes those entrepreneurs who waste resources by investing them in less important directions. Economic agents are motivated to avoid committing errors, because errors lead to a decrease of their capital.
The crisis shows a lack of coordination among entrepreneurial plans. The current crisis was possible because the existing institutional framework introduced perverse incentives. They refer not only to specific governmental measures that have externalized the real cost of certain business activities, making them artificially profitable – such as subsidizing lending and housing construction, encouraging discriminatory lending to a certain social segment, guaranteeing the value of assets, finally taking private debt into public hands – but also to the monetary policy, itself a source of moral hazard. On top of monetary and banking system is central bank money as a producer. In this area we have a state monopoly, which may decide to increase the supply of money at a higher or lower rate depending on political interests. The central bank can always expand money supply, since the cost of paper money is virtually…  zero. Thus, it becomes very easy for the state to embark upon a too big to fail policy, which encorgaes bankers and other key financial players to accumulate debt and invest imprudently. The same incentives play a key role in shaping the interpretation of crisis and corresponding political answers. If people respond to incentives, then economists are no exception. Economists’ ideas are largely the product of their own interests and goals. Therefore, we must carefully take into account all these considerents before accepting any policy solution.

ŒCONOMICA no. 2/2010
Keywords: incentives, investment, saving preferences, inter-temporal coordination
JEL: B53, D02, D92, E32
Despre rolul stimulentelor în producerea, explicarea şi rezolvarea crizei economice