Hi,
I've just finished the book "Economics For Real People", and now I want to read a book that will expand more on the ABCT. What book will you recommend for me?
Thanks in advance
THe Wiki!
http://wiki.mises.org/wiki/Austrian_Business_Cycle_Theory_learning_materials
I don't think that ABCT can be properly understood without understanding economic theory in general. I would read Human Action, MES, and some Hayek if I were you before I would expect to really understand the theory.
With this said I think that the best books on the subject are those written by De Soto and Rothbard's America's Great Depression
This is a good read taken from Human Action
https://mises.org/daily/4309
A classic is Hayek's Prices and Production, available here:
The Anarch is to the Anarchist what the Monarch is to the Monarchist. -Ernst Jünger
Student had some critique of Rothbard's AGD where he said he's inconsistent, and that you should rather read Garrisons's exposition later on. Then again, I don't know that much about the technical aspects of ABCT, so I can't help much :P
You can try MES.
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"Student had some critique of Rothbard's AGD where he said he's inconsistent, and that you should rather read Garrisons's exposition later on. Then again, I don't know that much about the technical aspects of ABCT, so I can't help much :P"
That was an interesting discussion and a lot of what Student said was something that I'd never heard before. Frankly I don't understand the problem that was posed in the first place, especially if we do consider underconsumption and market frictions to be theoretically possible. I've recently come to understand ABCT as primarily being the result of a sudden shift in economic conditions, as well as a series of catalysts that allow this to actually occur.
I've just read the replies. Thank you for your answers. I think I'll try MES.
@OP
Don't bother with Rothbard. ABCT has changed a lot in the past few decades (wouldn't you be suprised if it hadn't?).
You want to read Roger Garrison. Specifically, I think this article he published in HOPE back in 2004 does a great job of summarizing modern ABCT.
http://www.auburn.edu/~garriro/strigl.htm
When you hear Bob Murphy, Pete Bottke, or most other modern Austrians talking ABCT, they are leaning on Roger Garrison. THIS is the place to start.
@Wheylous & Neodoxy,
Indeed, I do think Rothbard and Garrison contradict each other. Thanks for taking note. :) I support my argument in this old post: http://mises.org/community/forums/p/22237/393287.aspx#393287
It all boils down to the fact that Garrison's theory predicts that investment and consumption will rise together during the boom phase. Rothbard's theory does not. This is bad news for exactly the reasons Paul Krugman pointed out in his 1998 magazine piece. http://www.slate.com/articles/business/the_dismal_science/1998/12/the_hangover_theory.html
And I honestly don't think I am the only person to point this out. Pete Boettke of GMU makes a similar point in this blog post from a few years back (he doesn't single out Rothbard by name but if you read MES or AGD you will see he is one of the "standard textbook" authors he is referring to). And if you read the entire blog post you will see that PB doesn't think Garrison is the final word on the subject either. He thinks Austrian economists should continue grappling with this issue to make sure ABCT conforms to empirical evidence. He's a smart guy.
Peter Boettke: Roger Garrison has tried to explain the possibility of comovement [between investment and consumption] due to the artificial nature of the boom which appears to violate the scarcity constraint...in the standard textbook presentation of the Mises-Hayek story we do not see comovement, but the distortion of the structure of production, which is then corrected during the bust phase. http://www.coordinationproblem.org/2011/01/call-all-economists-lets-answer-a-serious-question.html
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Yeah I'm not sure where that suggestion of MES came from. I think that Austrian Business Cycle Theory learning materials list is pretty comprehensive. It does in fact include Garrison's site (his Time and Money slides are excellent), as well as his annual Mises University lectures on the subject.
Boettke doesn't say there is something wrong with Rothbard's description, unlike Student who didn't understand it.
I didn't want to get into this argument again, since I stated my case very clearly already in another thread. Only because I saw someone write here that "Student had some critique of Rothbard's AGD where he said he's inconsistent", as if Student has something of value to say on this topic, did I reply to Studen't last post over there, explaining in the simplest possible language why he is mistaken, and how he misunderstood both Rothbard and Boettke.
Here it is: http://mises.org/community/forums/p/33134/516983.aspx#516983
Moral of the story: It does not suffice to read a lot of books. One has to understand them.
Bottom line: If you like Rothbard's stye, go ahead and read his books. You will learn a lot.
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It's easy to refute an argument if you first misrepresent it. William Keizer
For the record I don't have something against MES, I was just simply voicing an agreement on that part because it's not exactly the first (or even third or fourth) work I would think of naming for someone specifically asking for "Recommendation on books about ABCT".
If you want Rothbard on ABCT, I would think Economic Depressions: Their Cause and Cure or America's Great Depression would be more appropriate.
I suppose the single most authoritative work would have to be The Austrian Theory of the Trade Cycle and Other Essays.
This is said by someone that clearly didn't read the Boettke post.
Here is a summary of the post:
PB notes that the he standard textbook version of ABCT (i.e. Rothbard's theory) simply does not predict that investment and consumption will move together. Tyler Cown, Paul Krugman, and others have noted that this is an "embarassing fact" for ABCT because in the real world we DO see comovement between investment and consumption. This is why The ENTIRE POINT of PB's post is to encourage Austrian economists to try and respond to this empirical reality and to explain why there is comovement between consumption and investment from an Austrian perspective. As PB notes, Garrison has already tried to do this, but he apparently feels like Garrison's work is only a first step in answering this question.
http://www.coordinationproblem.org/2011/01/call-all-economists-lets-answer-a-serious-question.html
Now, that is the last I am going to say about it. Well, the last I'm going to say about it to Dave anyways. Conversations with him are pretty exhausting. He basically assumes anyone that disagrees with him is brainwashed, braindead, or dishonest. And that gets old pretty fast. Besides, I don't want to de-rail a quality thread because someone has a personal beef.
"He basically assumes anyone that disagrees with him is brainwashed or lying. And that gets old pretty fast."
I don't think that that's the problem half as much as his amazing ability for selective reading and poor reading comprehension which means that he very rarely actually seems to understand what he's arguing against, although it does make it a thousand times easier to actually argue. My favorite case of this came back in August where Dave posted something on his blog that supposedly critiqued my claim that the BWF isn't a very good argument when talking about recessions. He couldn't respond in forum because he was banned at this point. The reaction by Aristophanes perfectly captured how I felt about the post:
"Is SD having trouble reading mises.org also?"
Anywaays,
JJ,
I thought I made it clear why I recommended MES. I don't consider ABCT to be something that can be understood without having a good understanding of Austrian Theory, particularly production structure and capital theory. MES also has a pretty extensive section on business cycles.