scholarly journals Time preference and investment expenditure

2021 ◽  
pp. 13-33
Author(s):  
Jörg Guido Hülsmann
Keyword(s):  
Business Cycle ◽  
Time Preference ◽  
Jel Classification ◽  
Business Cycle Theory ◽  
Austrian Business Cycle Theory ◽  
Investment Expenditure ◽  
Aggregate Consumption ◽  
Social Time ◽  
Austrian Business Cycle ◽  
Total Investment

This paper offers a critique of the Austrian theory according to which social time preference determines the proportion between aggregate consumption and aggregate saving, and therefore also the volume of total investment expenditure. We argue that there is no such necessary relationship between the (pure) interest rate and the volume of aggregate investment. Then we discuss the implications of our thesis for growth theory and business-cycle theory, stressing in particular the need to distinguish between two types of growth and two corresponding types of inter-temporal misallocation. Key words: Time Preference, Time Market, Investment Expenditure, Growth Types, Inter-Temporal Mis-allocation, Austrian Business-Cycle Theory, Austrian Macroeconomics. JEL classification: B53, D01, D40, D92, E22, E32, E43. The purpose of this paper is to offer a critique of the theory according to which social time preference determines the proportion between aggregate consumption and aggregate saving, and therefore also the volume of total investment expenditure. This theory is held by virtually all Austrian economists past and present. We will first present it based on Rothbard’s Man, Economy, and State, where it is stated in the clearest and most detailed form. Then we will examine its shortcomings and discuss some implications of our findings.

scholarly journals The Mises-Hayek business cycle theory

2021 ◽  
pp. 81-133
Author(s):  
Robyn Harte- Bunting
Keyword(s):  
Financial Crisis ◽  
Business Cycle ◽  
Banking Sector ◽  
Jel Classification ◽  
Policy Recommendations ◽  
Business Cycle Theory ◽  
Austrian Business Cycle Theory ◽  
Palabras Clave ◽  
Austrian Business Cycle ◽  
Similarities And Differences

The Paper is an Overview of Austrian Business Cycle Theory (ABCT) phenomena it is intended to explain, economy wide crisis especially concentrated on the banking sector. A short examination of similarities and differences between Mises and Hayek, the main developers of ABCT, is then given. Finally, some policy recommendations are examined in the light of ABCT. Key words: Financial Crisis, Business Cycle, Inflation, Saving. JEL Classification: B53, E42, E44, E61, G01, G21, P10, P20. Resumen: El artículo es una visión general de la Teoría Austriaca del Ciclo Económico (TACE) basada en un primer contacto con la literatura. La TACE se presenta en términos de los fenómenos que intenta explicar: crisis eco-nómicas, concentradas en el sector bancario. Después se expone una breve investigación de las semejanzas y diferencias entre Mises y Hayek, los prin - cipales contribuyentes a la TACE. El trabajo concluye con unas recomenda-ciones de política económica que se analizan a la luz de la TACE. Palabras clave: Crisis Financiera, Ciclo Económico, Inflación, Ahorro. Clasificación JEL: B53, E42, E44, E61, G01, G21, P10, P20.

scholarly journals Business Cycle and Stability of China’s Financial and Monetary System

2020 ◽  
pp. 123-171
Author(s):  
William Hongson Wang ◽  
Antonio Vegas García
Keyword(s):  
Business Cycle ◽  
Banking System ◽  
Central Banking ◽  
Jel Classification ◽  
Shipping Industry ◽  
Business Cycle Theory ◽  
Austrian Business Cycle Theory ◽  
Monetary System ◽  
Austrian Business Cycle ◽  
China’S Economy

The importance of China’s economy and the instability of China’s fi-nancial system are in the spotlight recently. This paper uses Austrian Business Cycle Theory to gauge the potential risks of China’s economy. The approach of this paper is a sector analysis, focusing on China’s monetary and financial system, shipping industry, and real estate industry, especially the state-owned enterprises in those sectors. We conclude that China’s central banking system is hurting China’s economy and we also propose reforms to overhaul the system, according to the perspective of praxeology and Austrian School Econom-ics. Keywords: Austrian Business Cycle Theory, China’s banking system, China’s economy. JEL Classification: B53, D8, E310, E32, E52, H12, N15, N27, N45, N65, O53, P11, R3, R4, Y10. Resumen: La importancia de la economía china junto con la reciente inestabili-dad del sistema financiero de China, preocupan al resto del mundo. Este artí-culo usa la Teoría Austriaca del Ciclo Económico para identificar los riesgos potenciales de la economía de China. En este artículo realizaremos un análisis sectorial, enfocado en el sistema monetario y financiero de China, el sector de la construcción, la industria marítima y, en especial, las empresas estatales de dichos sectores. Concluimos que el actual sistema de banca central en China está dañando a su economía y proponemos soluciones desde la perspectiva de la praxeología y la Escuela Austriaca de Economía. Palabras clave: Teoría austriaca del ciclo económico, sistema bancario chino, economía china.

scholarly journals Preferencia temporal, múltiples tipos de interés y la teoría austriaca del ciclo económico

2021 ◽  
pp. 13-63
Author(s):  
Alejandro J. Zamora
Keyword(s):  
Interest Rate ◽  
Business Cycle ◽  
Interest Rates ◽  
Term Structure ◽  
Jel Classification ◽  
Business Cycle Theory ◽  
Austrian Business Cycle Theory ◽  
Preference Theory ◽  
Austrian Business Cycle ◽  
The One

Traditional expositions of the Austrian Business Cycle Theory (ABCT) rest on the reference to only one – equilibrium – interest rate. This paper, on the one hand, explores the theoretical validity of such a reference and, on the other hand, analyses whether it is essential to the ABCT. To address both issues, we depart from a defense of the recently-disputed Pure Time Preference Theory (PTPT), which purports to explain the cause of the phenomenon of interest and serves as a basis for the ABCT. In the light of our study, in the first place, we reject some of the formulations of the PTPT that lead to erroneous interpretations of this theory and we put forward an enunciation that avoids common confu-sions; secondly, we deny the validity of the reference to only one interest rate as well as its essentiality to the ABCT; finally, we point out the necessity of up-dating the exposition of the ABCT in consonance with the previous conclusions. Key words: Austrian Business Cycle Theory, Business Cycles, Pure Time Prefe-rence Theory, Interest Rates, Term Structure of Interest Rates. JEL Classification: E32, E40, E43, E50, B53. Resumen: Las exposiciones tradicionales de la Teoría Austriaca del Ciclo Eco-nómico (TACE) se apoyan en la referencia a un único tipo de interés de equili-brio. Este artículo, por un lado, explora la cuestión de la validez teórica de dicha referencia y, por otro, estudia si ésta es realmente esencial a la TACE. Para analizar dichas cuestiones, partimos de una defensa de la recientemente cuestionada Teoría de la Preferencia Temporal Pura (TPTP), teoría que preten-de explicar la causa del fenómeno del interés y que sirve de fundamento a la TACE. A la luz de nuestro estudio, en primer lugar, rechazamos ciertas formu-laciones de la TPTP que conducen a interpretaciones erróneas de la misma, proponiendo una enunciación de la teoría que evita confusiones comunes; se-gundo, negamos la validez de la referencia a un tipo de interés único y su carácter esencial a la TACE; por último, notamos la necesidad de actualizar la exposición de la TACE conforme a las conclusiones antedichas. Palabras clave: Teoría Austriaca del Ciclo Económico, Ciclos Económicos, Teo-ría de la Preferencia Temporal Pura, Tipos de Interés, Estructura de Tipos de Interés. Clasificación JEL: E32, E40, E43, E50, B53.

scholarly journals Minsky’s Financial Instability Hypothesis vs. Austrian Business Cycle Theory

2018 ◽  
pp. 155-186
Author(s):  
Olga Peniaz
Keyword(s):  
Comparative Analysis ◽  
Interest Rate ◽  
Business Cycle ◽  
Empirical Studies ◽  
Jel Classification ◽  
Financial Instability ◽  
Business Cycle Theory ◽  
Austrian Business Cycle Theory ◽  
Palabras Clave ◽  
Austrian Business Cycle

This article represents a detailed theoretical analysis, focusing on two heterodox theories: the Minsky’s Financial Instability Hypothesis and the Aus- trian Business Cycle Theory, particularly in the light of the 2008 crisis. It provi- des a theoretical comparative analysis of these theories and a review of the empirical studies of two approaches. Keywords: Economic crisis, interest rate, austrian business cycle theory, finan- cial instability hypothesis. JEL Classification: E32, E44, E52, E58. Resumen: Este artículo ofrece un análisis teórico detallado, centrado en dos teorías heterodoxas: la Hipótesis de la Inestabilidad Financiera de Minsky y la Teoría Austríaca del Ciclo Económico, especialmente en vista de la crisis de 2008. Este trabajo proporciona un análisis comparativo teórico de estas teo- rías y una revisión de los estudios empíricos de ambos enfoques. Palabras clave: Crisis económica, tipo de interés, teoría austriaca del ciclo eco- nómico, hipótesis de inestabilidad financiera. Clasificación JEL: E32, E44, E52, E58.

Sign in / Sign up

Export Citation Format

Share Document