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- Title
Austrian business cycle theory: Empirical evidence.
- Authors
Bismans, Francis; Mougeot, Christelle
- Abstract
The Austrian approach to business cycles has been seldom examined in econometric terms. This paper first reviews the essentials of that approach and the recent application of the Austrian business cycle theory in the economics literature. Quarterly data for Germany, USA, England and France, 1980:1 through 2006:1, are used to explore business cycle facts and relations between terms structure of interest rates, relative prices, composition of aggregate expenditure and real GDP. Results are consistent with the hypothesis of the Austrian business cycle theory that monetary policy shocks explain cycles. The changes in term structure of interest rates and composition of aggregate expenditure are large enough to explain changes in aggregate economic activity.
- Subjects
BUSINESS cycles; ECONOMETRICS; ECONOMICS literature; GROSS domestic product; ECONOMIC indicators
- Publication
Review of Austrian Economics, 2009, Vol 22, Issue 3, p241
- ISSN
0889-3047
- Publication type
Article
- DOI
10.1007/s11138-009-0084-6