The Austrian Business Cycle Theory states that entrepreneurs are not able to distinguish between money that comes from genuine savings and money created through credit expansion by the Fed. But surely the Fed keeps track of how much money they loan into existence.. If entrepreneurs know this, should…

would savings accounts figures give some idea? would an entrpreneur ever know exactly how much gold there was in peoples safes???

I agree that the credit expansion will inevitably lead to the new money being snatched up and utilized, but shouldn’t entrepreneurs be able to realize that investing this money in long-term projects would be a mistake? Is it simply a matter of not enough people being familiar with the ABCT?

But if people know that the new money is being generated through essentially counterfeiting, shouldn’t they have the foresight to avoid investing this new money in long term projects? Even if they’re not familiar with the formal ABCT, shouldn’t experience teach them this anyways? This is a good …

Some of the money comes from the Fed creating it, some comes through commercial banks lending out money while still having it be redeemable on demand, known as fractional reserve banking. And yes it does matter where the dollars come from.. if they come from people saving money, it means people are…

I agree that the credit expansion will inevitably lead to the new money being snatched up and utilized, but shouldn’t entrepreneurs be able to realize that investing this money in long-term projects would be a mistake? Is it simply a matter of not enough people being familiar with the ABCT? My o…

I think you’re right to an extent.. I see this as helping to explain why the banks would be more willing to lend money, but not necessarily why entrepreneurs would be more likely to sink the money into big projects if they know they it will come back to bite them later on. I agree this plays into…

Entrepreneurs know perfectly well about the free punch-bowl and that money is much easier than it otherwise would be. The Fed has rung the bell and the zero-sum race of inflationary wealth reallocation has started. In this race, you have to keep running (borrowing, investing, taking risk, speculati…

When people go to gambling they know there is a substantial probability of them losing. The hope is that any acquired skills in whatever they’re playing will help them win, even if they know that the dealer is always working against them. Furthermore, most people are probably aware of the fact tha…

What’s with the lack of formatting.

Question about the ABCT

Economics Economics Questions

Smiling_Dave April 16, 2010, 1:33pm 14

OK I found this: Refutations of The Austrian Business Cycle/Austrian Economics - #4 by The_Late_Andrew_Ryan

Caplan asks your q, I think. Scroll down to New Libertys post of refuting links.

Topic		Replies	Views
Have I correctly described ABCT? Economics Questions	5	3807	April 19, 2011
Question on ABCT Economics Questions business-cycle	9	2279	February 13, 2008
Some more clarifications on my post about the shortcomings of the ABCT Economics Questions business-cycles	34	4686	November 1, 2010
ABCT in a few minutes Economics Questions	38	11055	May 14, 2012
Clarifications About the ABCT Economics Questions abct , capital-goods	8	1655	May 18, 2010

Question about the ABCT

Related topics

Related on the wiki