The following video https://www.youtube.com/watch?v=PHe0bXAIuk0 argues that credit is the principal force behind the business cycle.

Is this considered to be a established truth within some school of thought and is there a specific school of thought that disagree?

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    $\begingroup$ FYI, this is how austrian economics views the business cycle $\endgroup$
    – EconJohn
    Jul 16, 2019 at 14:40
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    $\begingroup$ I think you need to at least dig out a summary quotation; “seems to argue” and “as far as I can tell” are not offering any sign that there is a definite question. If we do not know exactly what the question, how can we answer it? I am not going to watch the video, and information in the video is useless for text searches on this website. This damages the value of the question. $\endgroup$ Jul 16, 2019 at 22:47
  • $\begingroup$ @BrianRomanchuk you think it is better now? $\endgroup$
    – user123124
    Jul 17, 2019 at 6:44
  • $\begingroup$ It is still too open-ended. “Established truth” is not a standard used too often in economics, as there are various camps that disagree. There are theorists who also argue that credit is very important - Minsky, Keen would be examples - but they are are not in the “mainstream”. I sort-of agree with Minsky and Keen, but your summary is too blunt. I am unsure you could get an answer to your question as it stands. $\endgroup$ Jul 17, 2019 at 13:52
  • $\begingroup$ @BrianRomanchuk thanks for the feedack $\endgroup$
    – user123124
    Jul 18, 2019 at 8:13

1 Answer 1


I think this question is too open-ended and unqualified. One can point to two economists in particular who highlight the importance of debt in the cycle - Hyman Minsky and Steve Keen. Both of these economists are not considered to be “mainstream” (although Minsky has been more heavily cited since the Financial Crisis).

If we look at the data, we see that credit (debt outstanding) grows during the cycle, and this can cause financial distress (not always). However, one could argue that the debt growth is a side effect of growth, and not the causal factor. Even though I am highly sympathetic to Minsky’s work, that criticism appears valid. We need to qualify exactly what we mean, but the question has no such qualifications.

  • $\begingroup$ Its odd that such a prominent investor explians thing in that way if this is the case..what he says is not true then right? It is more a matter of rather dispuited opinion. $\endgroup$
    – user123124
    Jul 28, 2019 at 9:15

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