Thursday, December 2, 2010

Theories of What Causes Economic Downturns

Macroeconomists should use all five of them, alternatively or as complements to each other claims Brad DeLong, in order to explain current events. A much needed pragmatic and empirical-historical approach.

Missing in his list, however, is the Real Business Cycle explanation relying on technological shocks, unless he considers it a part of the Austrian theory.

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