Tomáš Frömmel contends that a negative inflation target combined with the Taylor Rule can be a non-distortionary monetary policy consistent with Austrian business cycle theory.
Even if the central bank policymakers could implement policies without error, Milton Friedman’s and Robert Lucas’s monetary schemes could not secure stable economic growth.
It is a huge mistake to call the repeating cycle of boom and bust a business cycle. That name implies the bust is the failure of markets and capitalism. But it is really due to monetary and credit inflation licensed and promoted by governments and central banks.
Easy-money policies pushed by central banks may be redirecting wealth away from investment, and toward greater production and consumption of cheap consumer goods. That's not "green."
A closer look at differences between Mises's and Schumpeter's economic theories suggests that their fundamental divergences have their origin in methodological and epistemological questions.
One of the characteristic features of this age is the general attack launched by all governments and pressure groups against the rights of creditors.
Bob Murphy and Nicolas Cachanosky discuss Austrian Business Cycle Theory, the dispute over Fractional Reserve Banking, and how the Federal Reserve broke monetary policy.
The destruction of capital, economic and otherwise, is contrary to every human impulse.
The length, scale, and scope of such downturns are greatly expanded under a system of fiat credit expansion.
The fundamental error of the interventionists is that they ignore the shortage of capital goods.
