Free Capitalist Network - Community Archive
Mises Community Archive
An online community for fans of Austrian economics and libertarianism, featuring forums, user blogs, and more.

Static tools for dynamic analysis Mises his abct

rated by 0 users
This post has 0 Replies | 1 Follower

Top 100 Contributor
Male
Posts 850
Points 13,615
AdrianHealey Posted: Thu, Aug 26 2010 8:52 PM

http://it.stlawu.edu/sdae/Vassei09.pdf

<= this paper argues that Mises his ABCT analysis is flawed.

Since I'm not an economics major, it took me a while to find out the major argument, but I think it goes something like this: 'Mises says that the money induced by the cheap credit will have effects on prices and wages. This should prevent a boom from happening!'

If (and only if) this assessment is correct, it's idiotic, because the most essential price - the interestrate - the organizes investment is still 'set' not by marketinteractions but by some other force. 

The reason why I think this assessment is correct, is also because in his conclusion he calls for a productivity theory of interest. There is some logic that if interest was determined by productivity, increasing the money supply wouldn't have boom/bust effects. But obviously; productivity can't explain interest. 

Anyone else wants to give his 2 cents on his analysis? What do you think is his 'essential' point against Mises? 

The state is not the enemy. The idea of the state is. 

  • | Post Points: 5
Page 1 of 1 (1 items) | RSS