Talk:Austrian business cycle theory

Edit Request

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The following quoted phrase, in the "similar theories" section, is gratuitous and should be removed. It is hardly settled fact that ABCT positive analysis depends on ideological animus.

"However, the explanations offered by these credit cycle theories do not depend on an ideological opposition to central banking, in the way that Austrian theory does."

— Preceding unsigned comment added by 75.74.190.241 (talk) 05:30, 30 May 2010‎ (UTC)

Quiggin

The BLUF of Quiggin, which he and others agree on, is: "To sum up, although the Austrian School was at the forefront of business cycle theory in the 1920s, it hasn’t developed in any positive way since then. The central idea of the credit cycle is an important one, particularly as it applies to the business cycle in the presence of a largely unregulated financial system. But the Austrians balked at the interventionist implications of their own position, and failed to engage seriously with Keynesian ideas." So how does this become "most think ABCT is incorrect"? The article text seems to be a gross over-simplification.--S. Rich (talk) 03:29, 7 January 2013 (UTC)06:02, 7 January 2013 (UTC)

Srich, it's directly before what you quote. MOST others..."conclusion, it’s one I share in broad terms with most of the mainstream economists who’ve looked at the theory" See also the end of Quiggin's piece in which he explains why "ABCT" is not a theory of the business cycle, but just an observation about the functioning of an economy with credit. Please re-insert "most." Meanwhile, per your note on your talk page, I've removed the failed verification tag. If you feel strongly about this please consider the Quiggins or other sources and re-work the criticism statement.Thanks.'''SPECIFICO''' (talk) 14:21, 8 January 2013 (UTC)

As above, that lead sentence in the Criticisms section is a gross over simplification. Quiggin still says "the central idea of the credit cycle is an important one..." etc. (Which sounds like he agrees with it.) His actual criticism is about the "interventionist implications" and "engaging" with Keynesian ideas. Since that is what Quiggin is saying, that is what needs elucidating rather than this broad brush statement about how "most" feel ABCT is incorrect. Perhaps his observations could go into a sub-section. Indeed, they should. (Thanks for removing the verification tag. And I'm still thinking about the other stuff you mentioned.)--S. Rich (talk) 15:21, 8 January 2013 (UTC)

Hi. I think the problem is this. Every economist knows that credit expands and contracts from time to time. Whether this is cyclic, whether it's correlated with expansion and contraction of various economic sectors, and whether any such relationship is causal, would need to be addressed in any robust theory of the business cycle. Nobody, Austrian or otherwise, has ever fully addressed all the issues. My quick take is that some the term ABCT has been popularized in the past decade by various commentators who are concerned about Fed policy, interest rates and monetary inflation. Their observations and concern are then mis-cast for various reasons into what's called a theory in the layman's sense but which is not a theory in the scientific or economist's sense. Anyway any contribution you can make would move things forward.'''SPECIFICO''' (talk) 18:13, 8 January 2013 (UTC)

Me? I'm a dilettante in this (and most other) area! I wonder if there is a difference between credit cycles and business cycles, or if they are linked, or how the election/political cycle interact, or how black swans come in and impact these things, etc. What I do understand is that readers need (and hopefully want) something more than "Most think ABCT/XYZ is wrong." Why do they think it's wrong? --S. Rich (talk) 18:38, 8 January 2013 (UTC)

Hi. I think the Quiggin citation states why, briefly: It is incomplete in the way I tried to paraphrase above. It's not a theory of the business cycle. Regardless of whether the article eventually goes into more detail, the fact remains that Quiggin's citation does support "most." Please consider and thanks for your efforts.'''SPECIFICO''' (talk) 19:05, 8 January 2013 (UTC)

I think that the mistake is to use to Quiggin as the only citation here. Elsewhere, the article mentions and even quotes many other prominent economists from across the ideological spectrum who attacked the ABCT in print. For instance, Piero Sraffa, Frank Knight, Nicholas Kaldor, John Hicks, Milton Friedman, Gordon Tullock, Paul Krugman, and Bryan Caplan. I have looked into the matter fairly extensively and I can say with confidence that it is true that the vast majority of economists who have considered the problem regard the ABCT as incorrect. This was a subject of intense debate in the 1930s, but after that the ABCT moved to the fringes and for the most part is now ignored. - Eb.hoop (talk) 00:42, 9 January 2013 (UTC)

This again wrong by SPECIFICO, in post-1945 textbooks except Paul Samuelson, the ABCT was featured whilst the Keynesian theory was barely mentioned. — Preceding unsigned comment added by Amanski (talk • contribs) 09:14, 13 January 2013 (UTC)

I don't think that this is true. Could you provide any examples of post-1945 textbooks that feature the ABCT? If you read, for instance, Ronald Coase's famous essay "How Should Economists Choose?" (1982) you will see that in the early 1930s Hayek converted many of the younger British economists to the ABCT, but only a few years later the Keynesian approach had displaced the ABCT completely among those who worked on macroeconomics. When Keynesianism itself was challenged in the 1970s it was by a monetarist-neoclassical approach, not by the ABCT, which has been decidedly in the fringe since the 1940s. - Eb.hoop (talk) 03:17, 18 January 2013 (UTC)

Influence

User: Specifico keeps deleting sourced material of economists who have been influenced by the theory. While the only economists influenced by it that are allowed to stay, are those who are critical. This is illegimate, if policy makers and theorists claim they are influenced by it then it is not proper to ignore it. — Preceding unsigned comment added by Amanski (talk • contribs) 09:14, 13 January 2013 (UTC)

The content you added in this section does not denote or describe influence but rather lists public figures who say that they have taken note of, liked, or believed what they or your sources call ABCT. The topic of this article is an economic theory. If you have RS descriptions of the specific manner in which ABC Theory influenced other theory or policy, please add it in explicit form. The content as you added it is not appropriate and I ask you to remove it. Thanks.'''SPECIFICO''' (talk) 17:43, 14 January 2013 (UTC)