Frank Shostak recently wrote that an increase in the supply of gold by itself cannot cause a boom-bust cycle as described by the Austrian Business Cycle Theory (ABCT). If that were true, then Austrians would have no explanation for booms and busts prior to central banking.

Austrian economics is a scholarly tradition that consists of a body of theory that explains how an economy works. Austrian economists develop theory a priori, meaning explanations are derived logically from sound starting points (i.e., the “action axiom” to Mises). This means the theory is true and can therefore be used to uncover the actual causalities behind observable phenomena.