Austrian Economics: Political Economy, Public Policy and Monetary Economics (Session 2)

Sophy Ramírez  | 03 de noviembre de 2018  | Vistas: 31

Richard Ebeling in this session explains the causes and the consequences of the economic crisis of 1930 in the United States. Also, the Keynesian arguments about the crisis and the critics that the Austrian School of Economics gave to that theory.

Richard presents the historical context of what happened in the USA before the crisis, how the technological revolution changed the society, the effects on inflation, on salaries and how these factors provoked the crisis, that's still a today's problem, according to him.

Basically the problem was that wages were far more sticky, rigid or slow in adjusting to reflect the declining markets for the output that labor was employed in.”

Ebeling mentions the origin of Keynesian Economics, the influence it has on modern macroeconomics and remarks on the faults that the Austrian economist, Friedrich Hayek detected in this economic theory.

He shares his perspective on the business cycle and capital growth, considering aspects such as consumer goods, loan market, investment goods, and production possibility frontier; also explains the way that economy should be managed.

After this, he continues developing on the great depression details, giving examples with graphics of the ideal management of the economy and how it would have worked.

It was not a crisis of capitalism; it was a crisis of the intervention state and government intrusion into the forces of the market itself.”

Ebeling concludes talking about the laws of the market as the economists Jean-Baptiste and John Stuart Mill argued, and how we can get an economy-wide balance.