The upper turning point in the Austrian business cycle theory

Anthony Evans, Nicolas Cachanosky and Robert Thorpe ()
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Robert Thorpe: Independent scholar

The Review of Austrian Economics, 2022, vol. 35, issue 1, No 5, 89-97

Abstract: Abstract This paper defends the relevance of Austrian Business Cycle theory (ABCT) within a fiat money regime, by providing an answer to whether a constant rate of credit expansion necessarily leads to a boom-bust cycle. We claim that this scenario has two potential outcomes, (1) a change in money demand brings the economy back towards equilibrium or (2) the economy will shift to a sub-optimal but still sustainable path. We identify capital heterogeneity effects and the Ricardo effect as distinctly Austrian explanations for an upper turning point, even in a fiat money regime.

Keywords: B53; E32; Business cycles; Austrian business cycle; Turning point (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:kap:revaec:v:35:y:2022:i:1:d:10.1007_s11138-019-00497-2

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DOI: 10.1007/s11138-019-00497-2

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