Disaggregate It Further: A Brief Rejoinder to Andrew Young (2012)

Abstract

Young (2011) proposes a sophisticated approach to confronting the Austrian Business Cycle Theory with evidence. However, this approach is ultimately inconsistent with the central prediction of the theory about the presence of excessively roundabout investment projects turning sour on the eve of the economic bust. The problems of this approach ultimately stem from an excessively aggregative version of the theory.