This presentation starts by looking at how the market process works: coordination through prices and profits.
The two alternative theories of the business cycle are introduced:
- The non-Austrian theories, which blame the cycle on the free market and call for government to take control.
- And the Austrian Theory of the Business Cycle (ABCT), which blames the cycle on government manipulation of interest rates.
The boom, bust and recession stages of the ABCT are analyzed in detail. It is concluded that government actions only prolong recessions and make them more severe. And the business cycle would not occur with interest rates determined on a free market.
This presentation was first delivered in July 2010.