Austrians are different than Keynesians. Austrians think recessions are caused by government failure, while Keynesians think they are caused by market failure. Take the 2008 financial panic. Was it market failure and bad business models or was it using the government to subsidize housing plus mark-to-market accounting? We believe the latter…without the subsidies and bad accounting rule, the recession might not have happened at all.
Not All Recession Theories Make Sense
July 31, 2023