Its in the topic... In my mind the currenct crisis gives evidence to the theory BUT you still have people bashing the theory. When will the theory get any credibilty? I think never...
Premise: If A then B
True statement: Given A ergo B
False statement: Given B ergo A
Hence, given the current crises, B, we cannot truthfully infer that the ABCT, A, has been proved.
Also, ABCT is based on praxeology and, as such, cannot be disproven by empirical fact. For this to hold it cannot be proven by empirical fact either.
Well I wasn't looking for a science answer... but I think its commonsensical that artificially low interest rates led to the current financial meltdown.
Almost every recession is proof of ABCT. It doesn't matter if it is this recession, the 2001 recession, the recession of the early 90s, etc. It's quite clear that the Fed expanded credit, which caused unsustainable overinvestment. However, monetarist, new classical, and Keynesian economists keep on finding illogical explanations and they confuse cause with effect (e.g. thinking that "irrational exuberance" and "credit crunches" cause recessions, when in reality credit expansion causes irrational exuberance and an eventual credit crunch).
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A retort could be: "... but I think it is commonsensical that illiquidity led to the current financial meltdown"
In this case it would be empirical fact against empirical fact? Who would be right?
I'm sorry to bring science to the table. It is not that I don't agree with you, nor that I disagree with the validity of ABCT. However, when you mention proof, evidence etc. you can't really disregard Philosophy of Science (epistemology, ontology, methodology etc.). ABCT takes this into account which is precisely why it still survives and why it has credibility still.
Wrong Thread
I have a better question. Have Austrians ever been wrong, starting from the Great Depression to now? I can't recall an instance, but can anyone here?
The answer is no because the general assumption is that there are more credible theories.
Or at the very least, ones less inconvenient to central banks...
-Jon
To darkness I condemn you...
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