As I said before, it’s just a different way of framing the problem. ‘Middle stage goods’ refers to that area between the highest and lowest. It’s the area that is pulled at by both sides during the boom. Some Austrians prefer to stick with higher v lower, whereas others use the ‘middle’ terminology. Different names for the same thing.
Don’t all goods get pulled depending on how new money is injected to the economy? If below market interest rate loans were offered exclusively to poor consumers, capital structures would shift as if consumers had expressed a higher time preference, leading to fewer long term investments and an eventual general shortage.
Same central bank… same theory about the function of interest rates. Just all depends how the credit is injected into the market.
Makes a reference to middle-stage goods in the ABCT. Then again, it’s an empirical examination of the theory, so…
All goods get ‘pulled’ in some way or another, but the reason for the bust is the inherent tension between the lack of savings and the malinvested funds.
I’m not sure why you’ve been hung up on this for so long. Middle stage goods is an acceptable term. I’ve heard it used before and it’s not even a big deal. The answer to the question is extremely simple, and I’ve never even heard a statist/Keynesian counter with anything effective
Believe me, I’m not the one hung up on this. As I mentioned, someone I’ve been debating with continually refers to middle-stage goods as his “critique” of the ABCT.
Well, you seemed to at first be at a loss as to what they were at all, and a few of the original posts here, possibly through miscommunication (or a different, possibly better understanding than me!), gave answers that seemed to suggest no concept existed, when that isn’t true.
Anyhow, when interest rates are lowered artificially, our consumer is actually motivated to spend even more than before and to save even less, which ends up with him buying more goods than before. Since the higher orders of production are malinvested in other, faulty ventures, the producers of ‘middle goods’ do not gain enough access to resources to increase their supplies to keep pace with increased demand. As a result, prices rise, savings are forced and the bust begins
Thank you. Indeed, I must admit that I wasn’t clear at first myself, and apologize for any misunderstandings or inconsistencies I appeared to exhibit regarding middle-stage goods.