Caplan’s criticism is one of the few well-reasoned critiques, but it has received a number of responses. Most of these are actually responses to a paper he wrote in the Southern Economic Journal, “The Austrian Search for Realistic Foundations”, which is very similar, so you should have no problem applying them to this particular critique. I’ll list the responses in chronological order, and I’ll include Caplan’s own rebuttals:
“Economic Science and Neoclassicism”, by Jörg Guido Hülsmann
“Austrian Theorizing: Recalling the Foundations”, and the errata, by Walter Block
“Kaldor-Hicks Efficiency and the Problem of Central Planning”, by Edward Stringham
“Probability, Common Sense, and Realism: A Reply to Hülsmann and Block”, by Bryan Caplan
“Realism: Austrian vs. Neoclassical Economics, Reply to Caplan”, by Walter Block
“Probability and the Synthetic A Priori: A Reply to Block”, by Bryan Caplan
“Rejoinder to Caplan on Bayesian Economics”, by Walter Block
Those are the direct responses, which directly quote and criticise Caplan. Caplan’s criticisms are, however, recycled from years past, so if you really want a good understanding of Austrian Economics, I suggest you also read books and papers that deal with the specific issues (e.g. indifference) brought up. You can find a reading list here.
This is an amateur criticism. Not only does the author not appear to understand the Austrian school, he also doesn’t seem to understand the “mainstream” approach he is promoting. Look at how many times he refers to Keynesianism, as if it didn’t die in the 1970s to be replaced by neoclassical economics. If somebody tries to use this against you, I suggest pointing them out this quote from the page on the gold standard: “History bears this out: the U.S. suffered eight depressions while on commodity money; in the 60s years since, it has suffered none.” Clearly, that is absurd; even ignoring the fact that Austrians criticise the fractional-reserve banking that caused the “depressions” while on commodity money, it’s just ridiculous to say that we haven’t suffered any “depressions” (he never defines what he means by a “depression”, so we can only assume he means a recession as determined by the NBER) since then.
If that doesn’t satisfy you, again I suggest reading some Austrian books and papers on the specific issues brought up. The list of literature is far too vast for me to list here (for business cycles alone, there are hundreds), but viewing the reading list I mentioned, and a search of mises.org should bring up anything relevant.
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Krugman is a professional economist, but this article is very weak. Perhaps this is because he has written it for a popular audience (although, I can find no academic paper he has written on the subject), so you’ll have to make due with “popular” Austrian responses, as opposed to the heavy academic discourse in journals à la Caplan.
“Contra Krugman”, by Roger Garrison
“Epstein Responds”, by Gene Epstein
“The Hangover Theory?”, by John P. Cochran
“Keynesian Confusions”, by David Gordon
For detailed expositions of the Austrian Business Cycle Theory, start with the reading list.
This paper appears to be very new, so it’s no surprise that there are no direct responses. However, the article seems to be invoking the concepts of capital reswitching and capital reversing, which have been dealt with before by Austrians:
“Austrian Capital Theory: The Early Controversies”, by Roger Garrison
“Reflections on Reswitching and Roundaboutness”, by Roger Garrison
“The Reswitching Question”, by Robert P. Murphy