Austrian business cycle theory

Where Friedman Meets Rothbard

One of the most significant pieces of legislation ever argued and turned into law was the Banking Act of 1935. Maybe even more than the Emergency Banking Act of 1933, the legislative basis for Executive Order 6102 and the end of gold inside the United States, the 1935 law codified what were in 1933 more properly observed as experiments. The [...]

Distorted Hayekian Triangle Reality

By Marcelo Perez|2012-09-14T23:53:18-04:00September 13th, 2012|Economy, Federal Reserve/Monetary Policy, Taxes/Fiscal Policy|

In 1935 Friedrich A. Hayek presented the following diagram of the productive stages of an economy's production. The insights drawn from this depiction of an efficiently allocated economy form the basis of Austrian Business Cycle Theory. A voluntary decrease in consumption and commensurate increase in savings lowers the slope of the hypotenuse, thus the real rate of [...]

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