scholarly journals Negative Inflation Targeting: A Proposal of a Non-Distortionary Monetary Policy

2019 ◽  
Vol 22 (3) ◽  
pp. 336-356 ◽  
Author(s):  
Tomáš Frömmel
Keyword(s):  
Monetary Policy ◽  
Business Cycle ◽  
Inflation Targeting ◽  
Business Cycle Theory ◽  
Inflation Target ◽  
Policy Objective ◽  
Austrian Business Cycle Theory ◽  
Austrian Business Cycle ◽  
Growing Economy ◽  
The Business Cycle

This paper aims to propose a non-distortionary monetary policy objective consistent with the Austrian business cycle theory. Since the price level should fall in the growing economy in the Hayekian framework, introduction of a negative inflation target combined with the Taylor rule is suggested as a non-distortionary monetary policy. To keep the money stream stable, the optimal inflation target would be equal to the opposite of the growth rate of the economy. Such policy should lead to the smoothing of the business cycle path since monetary policy could be less activist compared to the current state of the positive inflation target. Possible criticisms of this suggestion are anticipated and addressed in this paper.

scholarly journals Cykl koniunkturalny w rolnictwie z perspektywy austriackiej szkoły ekonomii

2015 ◽  
pp. 111-121
Author(s):  
Jacek Maśniak
Keyword(s):  
Monetary Policy ◽  
Business Cycle ◽  
Growth Phase ◽  
Food Production ◽  
Production Structure ◽  
Business Cycle Theory ◽  
Austrian Business Cycle Theory ◽  
Austrian Business Cycle ◽  
The Business Cycle ◽  
Polish Economy

The aim of the article is to present the business cycle in Polish agriculture from the Austrian school of economics perspective. According to the Austrian business cycle theory, the main cause of business cycle is an expansionary monetary policy. It leads to lengthening the production structure in the growth phase. The largest growth is observed in sectors situated far away from the consumer. However, in the recession phase these sectors face the biggest downswings. The agriculture is relatively prone to fluctuations of production. A study carried out for the Polish economy in years 1999–2013 showed that the fluctuations of global and final agriculture output was larger than the food production, but smaller than the industry production.

scholarly journals Book Review: "The Skyscraper Curse: And How Austrian Economics Predicted Every Major Economic Crisis of the Last Century"

2020 ◽  
Vol 23 (3-4) ◽  
pp. 627-633
Author(s):  
Michael Novak
Keyword(s):  
Business Cycle ◽  
Austrian Economics ◽  
Business Cycle Theory ◽  
Comprehensive Overview ◽  
Austrian Business Cycle Theory ◽  
Track Record ◽  
The World ◽  
Austrian Business Cycle ◽  
The Business Cycle

Mark Thornton’s The Skyscraper Curse exposes readers to the unique phenomenon of the Skyscraper Index and provides them with a comprehensive overview of Austrian business cycle theory (ABCT). The Skyscraper Index, as readers learn in the first few pages of the book, shows a correlation between the development of a new tallest building in the world and the business cycle. Although the Skyscraper Index does have a strong track record, the skyscrapers are not the heart of the matter but rather the policies of the Federal Reserve that promote and encourage skyscraper development.

scholarly journals Lessons from a Review of Money, Banking, and the Business Cycle

2018 ◽  
Vol 21 (2) ◽  
pp. 97-113
Author(s):  
Brian P. Simpson
Keyword(s):  
Business Cycle ◽  
Interest Rates ◽  
Austrian Economics ◽  
Business Cycle Theory ◽  
Austrian Business Cycle Theory ◽  
Austrian Business Cycle ◽  
The Business Cycle ◽  
Rate Of Profit ◽  
The Relationship

Abstract Shawn Ritenour provides a review of my two-volume book titled Money, Banking, and the Business Cycle in the winter 2016 issue of The Quarterly Journal of Austrian Economics. This paper constitutes a response to some of the criticisms of the book in his review. In this response, I discuss topics such as the nature of profits, the sustainability of changes in time preference, the role of changes in prices versus changes in spending in the business cycle, the relationship between interest rates and the rate of profit, the nature of fraud, and the nature of value. I also discuss whether the structure of production can be measured using the average period of production. I address other issues raised by Ritenour as well. This discussion sheds light on Austrian business cycle theory and the nature of the business cycle.

scholarly journals The causes of the Japanese deflationary crisis in the light of the Austrian school of economics

2012 ◽  
Vol 3 (1) ◽  
pp. 29-48
Author(s):  
Bartosz Karpiński
Keyword(s):  
Monetary Policy ◽  
Business Cycle ◽  
Relevant Literature ◽  
Austrian School ◽  
Japanese Economy ◽  
Business Cycle Theory ◽  
Remarkable Case ◽  
Austrian Business Cycle Theory ◽  
Austrian School Of Economics ◽  
Austrian Business Cycle

The aim of this study is an attempt to indicate the causes of deflationary crises through the presentation of the phenomenon of deflation and its causes in the light of the Austrian school of economics and to show that the most remarkable case of deflation in recent history, which took place in Japan confirms the Austrian assertions in respect of factors causing severe deflation. For this purpose, basing on relevant literature, the author presents the Austrian view on the concept of deflation and the main aspects of the Austrian Business Cycle Theory. Subsequently, the author analyzes the monetary policy of Japan in the period preceding deflation, pointing out the facts from the contemporary Japanese economy seem to confirm the assertions of the Austrian school of economics.

scholarly journals Corporate Risk Evaluation in the Context of Austrian Business Cycle Theory

2020 ◽  
Vol 23 (2) ◽  
pp. 131-151
Author(s):  
Joanna Kruk
Keyword(s):  
Business Cycle ◽  
Net Present Value ◽  
Cash Flows ◽  
Capital Asset Pricing ◽  
Business Cycle Theory ◽  
Present Value ◽  
Austrian Business Cycle Theory ◽  
Austrian Business Cycle ◽  
The Business Cycle ◽  
Corporate Risk

This paper expands Fuller’s (2013) analysis of the net present value and interest rate changes in the context of the Austrian Business Cycle Theory. During the boom phase of the business cycle, the economy shifts to a more risky position as the result of entrepreneurs’ profit targeting. To quantify this risk the duration, defined as the number of periods that elapse before the average present value dollar is received from a stream of cash flows, can be used. The new risk-adjusted net present value is created after applying the duration to capital asset pricing model determining the discount rate that should be used to calculate the present value of the project.

Ceny w sektorze rolno-żywnościowym w warunkach cyklu koniunkturalnego

2016 ◽  
pp. 5-16
Author(s):  
Jacek Maśniak
Keyword(s):  
Business Cycle ◽  
Agricultural Land ◽  
Raw Materials ◽  
Business Cycle Theory ◽  
Food Sector ◽  
Austrian Business Cycle Theory ◽  
Fixed Assets ◽  
Austrian Business Cycle ◽  
The Business Cycle ◽  
Market Output

The aim of the article was to verify the hypothesis derived from the Austrian business cycle theory that the prices of goods produced in sectors which are most distant from consumers fluctuate more than the prices of consumption goods. A study carried out for the agri-food sector in the years 2001–2014 showed that the price of agricultural raw materials (agricultural market output) and natural resources (agricultural land) fluctuate more than prices of food products. The prices of fixed assets were relatively stable, which should not happen according to the business cycle theory.

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