3. Some Alternative Explanations of Depression: A Critique
Some economists are prepared to admit that the Austrian theory could “sometimes” account for cyclical booms and depressions, but add that other instances might be explained by different theories. Yet, as we have stated above, we believe this to be an error: we hold that the Austrian analysis is the only one that accounts for business cycles and their familiar phenomena. Specific crises can, indeed, be precipitated by other government action or intervention in the market.
Mark Thornton has already noted that Ben Bernanke’s professed admiration for Alexander Hamilton is overblown, especially in light of Hamilton’s ties to the crony capitalists of his day. But there is more to be said about this, and, surprisingly, not all of it to Hamilton’s discredit.
Dean Shepherd has a new article in the Journal of Business Venturing discussing the future of entrepreneurship research. A video of Shepherd talking through his major points can be found here, along with a gated version of the paper, which is aptly titled, “Party On! A call for entrepreneurship research that is more interactive, activity based, cognitively hot, compassionate, and prosocial.”
Congress and the First Lady teamed up to impose the “Healthy, Hungry-Free Kids Act” on school children across the country, but news of unintended consequences abound.
The stability of the Eurozone is back in the spotlight this week amidst Greece’s talks with its creditors—which seem to be going nowhere good. Some, like the UK, seem relieved at not having entered in such spurious monetary agreements. Others, like Germany and the IMF, seem desperate to convince the Greeks to do something, anything, to begin reforms that will enable them to pay their debts. But the Greeks are keen on pushing the issue past the breaking point—after all, there’s too much at stake for everyone to let Greece fail.
Part I. Business Cycle Theory | 1. The Positive Theory of the Cycle
Study of business cycles must be based upon a satisfactory cycle theory. Gazing at sheaves of statistics without “prejudgment” is futile. A cycle takes place in the economic world, and therefore a usable cycle theory must be integrated with general economic theory. And yet, remarkably, such integration, even attempted integration, is the exception, not the rule. Economics, in the last two decades, has fissured badly into a host of airtight compartments—each sphere hardly related to the others.
2. Keynesian Criticisms of the Theory
There are two standard Keynesian criticisms of the Mises cycle theory. One charge takes the followers of Mises to task for identifying saving and investment.
The secessionist impulse doesn’t seem to be going away in Europe. This month, the Wall Street Journal reported that the latest drive for secession comes from Sardinia. The leaders of the movement propose that the island, only part of Italy since the 1860s, be joined to Switzerland instead.
