Re: Will there be a new version of the ABCT to account for consumer credit?

Stranger — Sun, 15 Mar 2009 18:30:16 GMT

Even consumer goods have higher and lower orders, depending on their durability. For example food is a lower order good that you do not buy on a credit card because it is consumed within a few days of being purchased. That is why food consumption does not drop in a recession.

Televisions and automobiles, on the other hand, are consumer goods that are consumed over several years and are bought on credit.

Will there be a new version of the ABCT to account for consumer credit?

McDuffie — Sun, 15 Mar 2009 18:21:49 GMT

I have been learning about the ABCT. I want to be fluent in it prior to taking the ECO 105 class I mentioned in the other thread.

The version I have found that best breaks it down is the first 14:31 of this lecture by Dr. Tom Woods (my facebook friend ). In that lecture, Woods reminds us that Rothbard showed us that the bust phase of the business cycle hits higher orders of production more substantially, while consumer's goods aren't affected nearly as much.

To my mind, the reason why, in the past, consumer goods weren't affected as much is because consumer credit, as we know it today, didn't exist. Now that consumer credit is an industry, I would guess that consumer goods are far more affected by the bust phase of the business cycle. Is this the case, and are some Austrian economists working on a new, improved version of the ABCT to account for this?

Thank you

McD

Economics Questions

Re: Will there be a new version of the ABCT to account for consumer credit?

Will there be a new version of the ABCT to account for consumer credit?