Business Cycles

This paper is a review of Austrian School references in business cycle studies published by the National Bureau of Economic Research. 

This short note is a contribution to the solution of the problem of indifference in Austrian economics (“Nozick’s problem”). The problem is divided into two questions:

Austrian business cycle theory (ABCT) has focused on the effect of interest rates set below the natural rate, leading to unwarranted attempts by businessmen 

While damning the free market with the faintest of praise, Krugman’s book provides us with an excellent example of why it is so important to get the analysis right before prescribing policy solutions for an economic problem.

Garrison has a vivid sense for the necessity of adequate pedagogy to communicate Austrian ideas about the working of the economy, and he is very conscious of the power of symbols. 

That Hayek’s work on money, investment, and business cycle theory should be misunderstood and misrepresented poses nothing new. 

We contribute to the debate over the contemporary relevance of the Austrian Business Cycle theory (ABC) by making three theoretical developments.

Rothbard (1963) provides a compelling explanation of the Great Depression. He used the Austrian business cycle theory to show that the inflationary policies of the Federal Reserve

The 2007–2008 financial crisis, accompanying recession, and continuing slow recovery have reinvigorated crude Keynesianism as the foundation of a "somebody in charge" policy to combat recession and high unemployment.

The United States emerged with a superior technology early in the nineteenth century.