Austrians (as always) well predicted the current crisis...........Have they predicted its end??
If they did I would like to know more about it so we can discuss.
Thank you all for your responses.
Predictions are al qualitative, so you cant say how much McDonalds stock will go up on the month of June for example. They also depend on rapidly changing variables, and choices made by individuals. This could last 6 months or it could last 15 years.
Sure, there are a number of scenarios that can be predicted using Austrian thought. However, the specific outcome depends heavily on government and individual actions that are difficult to "predict" in any scientific sense of the word. Once you start trying to predict the actions of government, you are really outside of the realm of economics.
Given the current political outlook, I think most Austrians would say that we are headed either for rapid inflation or, if the banks sit on excess reserves, a long period of stagnation similar to what we see in Japan. I'm sure there are other outcomes that are more or less likely depending on what assumptions you make.
JustinTime: Sure, there are a number of scenarios that can be predicted using Austrian thought. However, the specific outcome depends heavily on government and individual actions that are difficult to "predict" in any scientific sense of the word. Once you start trying to predict the actions of government, you are really outside of the realm of economics. Given the current political outlook, I think most Austrians would say that we are headed either for rapid inflation or, if the banks sit on excess reserves, a long period of stagnation similar to what we see in Japan. I'm sure there are other outcomes that are more or less likely depending on what assumptions you make.
True, but I think we can make a good realistic scenario. Assuming banks wont lend because everyone is full of debt (companies, individuals,) Only govt can get into more debt and therefore, more govt intervention.
What then?? what would Austrians predict in these circumstances???
Luna: True, but I think we can make a good realistic scenario. Assuming banks wont lend because everyone is full of debt (companies, individuals,) Only govt can get into more debt and therefore, more govt intervention. What then?? what would Austrians predict in these circumstances???
Unchecked money creation by the Fed will lead to inflation. This may or may not manifest itself depending on factors such as banks' willingness to lend. If the economy does turn around, it will fuel the next boom-bust cycle. If not, we may limp along indefinitely, or the dollar may fail entirely. More intervention will only interfere with the market mechanism and prevent any real economic growth. I do not claim to speak for all Austrians, but I think most would agree with some variation of the above.
But what is a realistic scenario? Will the government force banks to lend? Seize control of private entities? Start a war? Declare a state of emergency and place us all under martial law? These are difficult questions to answer.
JustinTime: Luna: True, but I think we can make a good realistic scenario. Assuming banks wont lend because everyone is full of debt (companies, individuals,) Only govt can get into more debt and therefore, more govt intervention. What then?? what would Austrians predict in these circumstances??? Unchecked money creation by the Fed will lead to inflation. This may or may not manifest itself depending on factors such as banks' willingness to lend. If the economy does turn around, it will fuel the next boom-bust cycle. If not, we may limp along indefinitely, or the dollar may fail entirely. More intervention will only interfere with the market mechanism and prevent any real economic growth. I do not claim to speak for all Austrians, but I think most would agree with some variation of the above. But what is a realistic scenario? Will the government force banks to lend? Seize control of private entities? Start a war? Declare a state of emergency and place us all under martial law? These are difficult questions to answer.
A realistic scenario is one in which the govt does what they always do......................"intervene one way or another" ....................preventing (as you well said) the real economy from functioning.
hello..............anyone answer