🔥 Austrian Business Cycle Theory | What causes business cycles?

Austrian Business Cycle Theory tells us why there are business cycles in the economy. What causes business cycles? Watch and find out. Learn Austrian Economics in a fun way!

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[thomasmccann]

Main message I suppose: live within your means and detail your plan and outcomes.

[ScRaS]

Brilliant video! We really need someone to present real economics in simple ways such as this!

[waggawaggaful]

All the stimulus introduced into the economy during Covid finally made these concepts crystal clear to me.

[pundave]

That was like Borat talking about economics over Avatar ost, amazing!!

[keke]

Guys this video is fantastics, you deserved a lot more subscribe and likes for this, this is acutally mirroring the current market situation. Keep going, you must be shine in the future. Thanks for this video

[supersam]

Excellent visuals aids and editing . Mises Hayek Rothbard would be very proud

[krushnangpatel]

Beautifully explained. Keep up the good work.

[nthperson]

Modern economies suffer boom-bust cycles the source of which is the operation of land markets (land broadly defined as all of nature and assets with an inelastic supply). Whether money and credit are systemic as well or better described as externalities continues to be the subject to intense debate. Ricardo was on the right track as he developed his "law of rent, " if he had only extended his analysis beyond that of agricultural land. The real high rents arise as a claim on production as population growth occurs in cities. As Henry George observed, it is the failure of the community to collect societally-created rents to pay for public goods and services that forces government to tax earned incomes, tax capital goods and tax commerce -- all such taxes imposed serious deadweight losses on economic output while enriching non-producing "rentier" interests. The result is and has been a land market cycle lasting an average 18-21 years going back several hundred years.

[austinbyrd]

It doesn't just "trick" the market. It distorts fundamental incentives & capabilities.
Reserves fuel credit creation. Banks compete to drive down rates as to attract borrowers. Credit is now cheap & inflationary. Savings (since they're a liability) are paid less in interest, & are now discouraged because of this inflationary pressure. This cheap credit gets allocated to undemanded/lesser demanded ventures, while at the same time more people are spending instead of saving.
Bubbles in the economy form (along with our dependency on them), speculation & volatility increase, our time preference of consumption & production is worsed, inflationary pressure effects every price differently because of relative stickiness (so price signals are distorted), resources are misallocated, real wage growth is hindered because wages are more sticky, inequality increases as asset owners are granted artificial appreciation, & the poor are priced out of the market (forcing them into debt). Especially to buy assets like housing.

[karannchew]

Could someone please confirm my understanding is correct? 1:00: "Interest rate merely express the existing supplies and demand, not the other way round". This means: by right, the interest rate would simply reflect s the money supplies and demands. Artificially adjusting the interest does not really change the fundamental (consumer's) supply and demand.

[iranf.a]

Ahhh entendi. É por isso que o plano do ciro gomes de brincar com a taxa de juros não vai dar certo.

[psyeseease]

Please, link the previous video if you want people to watch it beforehand.

[mateobeccar]

Why was the Central Bank even created for to begin with though?
I mean, are there booms and busts in the natural market or why would government interfere?

[tamanpara]

Dude are you the chief economist for the Mexican drug cartels? What is with the drug analogies?

[avaragedude]

the only problem i have with this is the assumption that entrepreneurs will make malinvestments when credit is cheap and interest rates are low, well, they make malinvestments all the time, so it is about the quantity of malinvestments?

[ksawerytyzo]

That voice sounds fammiliar to me... Aren't you Polish youtuber?

[gorkemvids]

Bust is, price inflation without real money supply increase. isn't it?

[berntengdahl]

Please also include the Keynesian debunkings of this theory. Not everybody is going to learn about them by reading an actual economics textbook. Lots of people will only watch videos like these and come away with the impression that the Austrian business cycle theory tells you everything you need to know. And they they will vote based on that false belief.

[germangamingvideos]

One should note that this is only one theory, which doesnt allign with the mainly accepted theory

[skeetorkiftwon]

The issue is we do not measure value in joules. We speculate everything.