A Rejoinder to Brad DeLong

In his dismissive response to me, Brad DeLong provides some arithmetic that supposedly weighs against the Austrian theory of the business cycle as a plausible basis for understanding the current recession.The differences between DeLong and the Austrians are not to be resolved by doing the math but by understanding the theory. Tellingly, DeLong has overestimated and, at the same time, underestimated the significance of the housing bubble in the Austrians’ view of the current recession. FULL ARTICLE