Occam’s Razor in Economics
A response to ABCT from the typical person is a “well duh, of course if banks create money out of thin air, creating more claims on their supplies then they actually have, people will realize their insolvency and there’ll eventually be a bank run.”
Or “of course interest rates are a price just like any other price and coordinate market activity, and if you essentially place a price control on interest rates there’ll be unintended consequences.”
ABCT is common sense applied to economics. The reason that business cycles occur is not that complicated.
Posted on October 4, 2013, in Economics and tagged abct, austrian business cycle theory, Austrian economics, business cycles for dummies, central banks, fractional reserve banking, interest rates, occam's razor, occam's razor in economics, praxeology, printing money. Bookmark the permalink. Leave a comment.