Common sense in business cycle theorizing

By -
Someone attempting to understand the Great Recession was asking Bob Subrick and me about Austrian business cycle theory. We both agreed that it is a part of the story, but only a part.

I woke up the next morning and went online to find Tyler Cowen saying the same thing. Is common sense gaining ground in discussing business cycles? Surely, The real world being complex and all, many different processes are occurring in the economy at the same time. Distorting interest rates is going to do something. One question is, how much impact does it have? Another question is what other factors are also at work?

Comments

  1. Samson Corwell11:11 PM

    Over on the political forum that I belong to, I was told that booms and busts would be no more if the federal reserve were to be eliminated. Does that jive with ABCT?

    ReplyDelete
    Replies
    1. Anonymous1:05 AM

      "Does that jive with ABCT?"
      More or less, if the new monetary system is some kind of gold standard or similar. Rothbard, I think would have said you would also need to get rid of fractional reserve banking, and hell, probably credit cards and any other significant means of extending credit through "funny money, unbacked by gold".

      ABCT is complicated, and there seem to be a lot of subtle variations of it that are hard to understand. It doesn't help that its loudest proponents on the internet often contradict each other and themselves.

      Delete
  2. Anonymous1:18 AM

    "...Tyler Cowen saying the same thing. Is common sense gaining ground in discussing business cycles?
    Maybe, but it seems to me that this has been Cowen's more or less consistent line since 2008, at least.

    http://marginalrevolution.com/?s=Austrian+business+cycle+theory

    "What happened is best thought of as a bubble where loose monetary policy was one of several triggers but the market response was more at fault than was government."

    "Krugman on Austrian business cycle theory....Basically he's right..."

    ReplyDelete

Post a Comment

Popular posts from this blog

Libertarians, My Libertarians!

By -
Cruel to be kind means that I love you . Because, while I think you are mistaken, your hearts are in the right place -- yes, even you, Silas --  unlike some people . This Breitbart fellow (discussed in the link above), by all appearances, deliberately doctored a video of Shirley Sherrod to make her remarks appear virulently racist, when they had, in fact, the opposite import. I heard that at a recent Austrian conference, some folks were talking about "Callahan's conservative turn." While that description is not entirely inaccurate, I must say that a lot of these people who today call themselves conservative give me the heebie-jeebies.
Read more

"Pre-Galilean" Foolishness

By -
 I am currently reading The Master and His Emissary , which appears to be an excellent book. ("Appears" because I don't know the neuroscience literature well enough to say for sure, yet.) But then on page 186 I find: "Asking cognition, however, to give a perspective on the relationship between cognition and affect is like asking astronomer in the pre-Galilean geocentric world, whether, in his opinion, the sun moves round the earth of the earth around the sun. To ask a question alone would be enough to label one as mad." OK, this is garbage. First of all, it should be pre-Copernican, not pre-Galilean. But much worse is that people have seriously been considering heliocentrism for many centuries before Copernicus. Aristarchus had proposed a heliocentric model in the 4th-century BC. It had generally been considered wrong, but not "mad." (And wrong for scientific reasons: Why, for instance, did we not observe stellar parallax?) And when Copernicus propose
Read more