Business Cycles

Austrian economists do not have crystal balls, but Austrian business cycle theory provides a sure foundation for identifying looming economic crises and exacerbating factors, even if the precise timing of a downturn cannot be known.

Finn Kydland and Edward C. Prescott (KP), the 2004 Nobel laureates in economics think that technological shocks can explain 70 percent of economic fluctuations in postwar US data. Unfortunately their quantitative methods are simplistic and ignore the real problem: central banking.

Even if the central bank policymakers could implement policies without error, Milton Friedman’s and Robert Lucas’s monetary schemes could not secure stable economic growth.

Easy-money policies pushed by central banks may be redirecting wealth away from investment, and toward greater production and consumption of cheap consumer goods. That's not "green."