SEA Presentation: Financial Foundations of ABCT

Today I’ll be presenting a paper I wrote with Peter Lewin on the Financial Foundations of Austrian Business Cycle at the Southern Economic Association Conference in a panel shared with Thomas Hogan, Will Luther, Alex Salter and Anthony J. Evans (this is becoming a tradition already…)

You can read the full details of the topic in the paper. But in this slides I focus on what I deem to be core of the contribution of the topic I’ve been lately working with Lewin.

6 pensamientos en “SEA Presentation: Financial Foundations of ABCT

  1. Estoy leyendo el paper. Antes de terminarlo y sacar cualquier conclusión, debo decir que esta frase me parece esencial:

    “If Austrians are right, then the ABCT should be able to fit into how entrepreneurs and investors actually make decisions, rather than building a model (Garrison’s or otherwise) populated by economic agents who behave as if they lived in such a model”

    Esa es la clave de la cuestión. El problema es micro, no macro.

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  2. Quiero hacer una pregunta: yo entiendo lo que significa “roundaboutness”, pero no se me ocurre cómo expresar ese concepto en castellano. ¿Cómo traduciríamos esa palabra?

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  3. Leo el siguiente pasaje:

    “Consider two entrepreneurs, one who thinks that the interest rates in the
    market are too low (savvy entrepreneur), and another one who thinks the low interest rates is a fair representation of the equilibrium conditions (naïve entrepreneur.) The naïve entrepreneur is willing to discount the expected EVAs of the projects in his investment portfolio at a lower interest rate facing higher MVA values than the savvy entrepreneurs. This means that the naïve entrepreneurs are not only willing and able to outbid the former entrepreneur in the market of factors of production (this is why ABCT predicts a rise in the price of factors of production), they are also willing to “lock-down” resources in projects with larger D (assuming no significant changes in risk). Thinking about ABCT processes in terms of financial calculations clarifies why it is not the same to err upward or downward with respect to where the equilibrium discount rates are supposed to be. Errors do not cancel out even if the mean of the errors is correct (“rational.”)”.

    ¿Esto significa que están planteando la existencia de un “efecto contagio” derivado de las falsas señales de la baja artificial de la tasa?

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      • Entonces sería una especie de “Ley de Gresham” empresarial. El empresario malo desplaza al bueno. Pero el bueno, para no quedar afuera, tiene que adecuarse a las pautas que le impone el malo.

        Es un argumento análogo al que yo empleo para sostener que en un régimen de reserva fraccionaria la tendencia a la sobreexpansión se va extendiendo gradualmente entre todos los bancos, aun cuando algunos inicialmente quieran tener una actitud prudente. No pueden hacerlo porque pierden negocios y quedan afuera del mercado.

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