The role of ideal types in Austrian business cycle theory

Abstract

The Austrian theory of the business cycle (henceforth ABC) frequently has been a target for critics of Austrian economics. In particular, a number of economists who are generally appreciative of other Austrian themes have singled out ABC as being, in one such critic's words, an “embarrassing excrescence” marring the otherwise generally sound body of modern Austrian thought.¹ Despite such criticisms, many Austrian economists persist in forwarding ABC as the best available, or perhaps even the only valid, explanation for the cycles of boom and bust regularly occurring in most modern, national economies.

Citation

Callahan, G. and Horwitz, S. (2010), "The role of ideal types in Austrian business cycle theory", Koppl, R., Horwitz, S. and Desrochers, P. (Ed.) What is so Austrian about Austrian Economics? (Advances in Austrian Economics, Vol. 14), Emerald Group Publishing Limited, Leeds, pp. 205-224. https://doi.org/10.1108/S1529-2134(2010)0000014013