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As a disclaimer, I think the Austrian business cycle is incorrect. I will try to explain in a sympathetic fashion. Mises.org has a great deal of resources on Austrian economics, much of it free. From a quick watch of the beginning of the video, the distinction is between a market rate of interest, and the “artificial” interest rate set by the central bank. ...


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I too also think the austrian theory of the business cycle is incorrect but will offer a sympathetic answer. It really about understanding how the theory related to the structure of production and how lower interest rates incentives activities that are further behind in this structure and extends the time for this process to occur. Its interpreted as a ...


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It creates losses. First, many businesses don’t own their own building/land/equipment. It’s very common to lease these things. Moreover, many business take out insurance that again has to be paid on monthly basis. In Europe in many countries you need to pay workers certain portion of wages even when you can’t call worker to work or even if they stay home ...


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Business cycle fluctuations can be studied in many ways including also growth models. An example of using growth model to study business cycle would be this 1995 paper by Cho & Cooley. This being said growth models are not as common for examining business cycles as for example DSGE models so saying they are usually used for that purpose is correct. To my ...


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Your idea that unmaintend equipment costs nothing is also unrealistic. The major industry included in the \$2T bailout/stimulus is the airline industry. Planes left on the ground still require maintenance or preparation for longer-term mothballing. Because of the steep drop in demand for air travel and flight restrictions to international destinations, ...


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