Economics Questions

Re: empirical verification of business cycle

elcrack11 — Mon, 22 Nov 2010 23:37:04 GMT

I am aware of austrian methodology. However, in my university where keynesian economics dominates my thesis have to be based on statistic data and touch on real economy. I insist on writing about business cycle, but I can't just introduce theory and that's it. My thesis supervisor doesn't accept this. So I would write about Japan crisis in '90 according to ABCT.

Re: empirical verification of business cycle

Edmund Carlyle — Sat, 20 Nov 2010 18:07:18 GMT

A point to make is that there is no such thing as empirical evidence or verification for a praxeological theories. Some of our assumptions in describing economics (the existence of multiple people and money) are empirical claims, but even there, the arguments derived from these are not.

What historical data can be used for is to be analyzed from the perspective of theory, or used as an illustration thereof.

Re: empirical verification of business cycle

wadams — Sat, 20 Nov 2010 12:48:36 GMT

One thing that I should add: The ABCT is a real economy theory. The financial crisis (credit crunch, financial institution turmoil) was a symptom of the real economic crisis (mis-allocation of resources).

Re: empirical verification of business cycle

wadams — Sat, 20 Nov 2010 12:41:25 GMT

I agree with NewLiberty.

Murphy's idea using the percent change in employees in the different stages of production is a quick way to look at where resources are being directed.

Murphy's graph in his article shows the construction sector bust. For your purposes, I would extend the series to show the build up in construction (blue line) without a corresponding decline in retail (purple line). This is a period of over-consumption and over-(mal-) investment.

Re: empirical verification of business cycle

hugolp — Wed, 17 Nov 2010 15:34:20 GMT

I think you will like this: http://www.gmu.edu/depts/rae/archives/VOL14_4_2001/5_keeler.pdf

Re: empirical verification of business cycle

NewLiberty — Wed, 17 Nov 2010 13:57:00 GMT

Bob Murphy: Putting ABCT to the Test

http://mises.org/daily/4682

Re: empirical verification of business cycle

elcrack11 — Wed, 17 Nov 2010 12:29:32 GMT

Thank you for all sugestions. I agree with Modus Tollens that other factors can be more important and I can paint myself into a corner. Maybe I change the topic and write about crisis in which it is clearer that it was caused by monetary policy. For example Japan crisis in 90' should be easier to explain by ABCT.

Re: empirical verification of business cycle

Modus Tollens — Wed, 17 Nov 2010 01:27:20 GMT

Final Sales of Domestic Product began increasing above trend from 2003 to 2006. That would normally indicate loose money, but it may have just corrected for previous falls below trend. Moreover, the rise in Final Sales does not seem significant enough to account for the housing bubble. Perhaps loose monetary policy exacerbated the situation, but other factors may have been more important.

Re: empirical verification of business cycle

Angurse — Wed, 17 Nov 2010 00:43:20 GMT

http://www.ubirataniorio.org/emp.pdf

https://mises.org/journals/qjae/pdf/qjae9_2_4.pdf

Helpful?

Re: empirical verification of business cycle

bcyclwutztht — Tue, 16 Nov 2010 22:47:22 GMT

here's a couple that may be helpful:

Robert Higgs Anatomy of the Current Recession

Robert Higgs mises blog

come to think of it, check out Murray Rothbard's The Great Depression

empirical verification of business cycle

elcrack11 — Tue, 16 Nov 2010 22:31:26 GMT

Hello,

I am writing thesis about Financial Crisis from the viewpoint of the Austrian Business Cycle Theory. My main proposition is that last crisis can be explained by using ABCT. I am aware that Austrian School doesn't accept empirical verification of theory. Using indexes like Gross Domestic Product is not a good idea. And I haven't got a clue how to show the lengthening of the producture structure in US economy. One of subsections of de Soto Money, bank credit and economic cycle is Empirical evidence for the theory of the cycle. Do you know any other works about this topic - Empirical evidence for the theory of the cycle? I really appreciate your help and any suggestions.