Hi Mike, Epstein's column in this week's Barron's is an interview with Paul Krugman, economist we were discussing a couple of weeks ago. With respect to Austrians, Epstein wrote as follows:
"I objected to his having written that, before John Maynard Keynes came along, the world's understanding of recessions was 'in a state of arrested development.' Wasn't he familiar with the Austrian theory of business cycles, as set forth by Ludwig van Mises, Frederich Hayek, and their American disciple, Murray Rothbard? He allowed that he wasn't, implying that such ideas were off his radar screen, since they couldn't be expressed mathematically. In fact, however, the Austrians wrote brilliantly about the supply-side, and what they had to say is quite relevant to an understanding of the global slowdown."
Not being an economist, I may have misunderstood Krugman, but I am fairly certain that he thinks that recessions are caused by people trying to hold on to capital, rather than letting it circulate, causing a liquidity crunch, and so on. I believe that was the point of the stuff I excerpted a couple of weeks ago. Certainly Keynes was the first to suggest this that I have ever heard of, anyway. You yourself keep saying that all Greenspan has to do is give us each a million bucks, which I have been supposing was a joking way of saying the same thing. I watched Greenspan's speech this week on CNBC, he seemed to allude (the ever allusive Chairman Greenspan) to this, I understood that the Fed was committed to keeping liquidity by pumping in cash or whatever was needed, to avoid recession. So Greenspan is a Keynsian now, although who knows whether it's him or the position.
I used to read von Mises, and Hayek, haven't come across their business cycle stuff, but I just got Rothbard's history of the Great Depression from the library last week, just opened it up and it does talk about business cycles, looked in the index, he doesn't cite Kondratieff, or Kitchin, but he does cite Kuznets. So I'll give it a read and if I see anything interesting, let you know.
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