-
In my previous post you guys brilliantly answered on why Caplan et al. were wrong in their rebuttal of ABCT regarding their claim of rational expectations. Now, another critique which I found it hard to find any material upon (the Mises Wiki does not really answer on this matter either) the objection...
-
I was searching for rebuttals of the common objection by neoclassical economists made against ABCT: That is, how come entrepreneurs foolishly just respond to the lowering of interest rates hence comitting devastating mistakes rather than possessing some level of rational expectations making them understand...
-
I have read and reread Tom Woods’s fantastic book, Meltdown. However, I’m stuck on a question concerning Austrian Business Cycle Theory. In particular, I would like to gain a better understanding of the impact of unutilized productive capacity in a market and its ability to absorb monetary...
-
Yes, that sounds right, I'd specifically say the price that is distorted, relative to all other prices, is the interest rate, which is affected immediately upon money creation. It takes time before other prices in the economy rise therefore giving the immediate illusion to the borrower that a project...
-
ABCT holds that business cycles are caused by an increase in the supply of money. I understand the supply part of ABCT pretty well, but I do not understand how demand factors in. For example, wouldn't the decrease in the demand for money also cause business cycles? Why such a decrease not result...
-
Can he? Supposing Dr. Paul gets elected president how would he be able to end the FED? There are tons of people who have an incentive to keep the FED around that he'll have to go against. It's just him and a handful of others in DC who want to end it. Do you think FED ending is realistic?
-
Is Austrian Business Cycle Theory consistent or are there many different interpretations of the theory?
-
Recently a fellow Austrian commented on my post Austrian Economists Need to Get Their Business Cycle Theory Straight . I will post his statements from Correction on the Austrian Business Cycle Theory and comment on them when necessary: One criticism that has come up is that the Austrian theory does not...
-
I have described the basic workings behind the business cycle more or less accurately. However, I have noticed that some things in my description and conclusions remain inconsistent. The lines between too much production spending and too much consumption spending are blurry and confusing. It is necessary...
-
You are very accurate with this great observation. I wrote a piece on what I think is not a flaw, but rather a correctable insufficiency of the ABCT: I have described the basic workings behind the business cycle more or less accurately. However, I have noticed that some things in my description and conclusions...