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An Austrian Perspective - The Great Recession of 2008


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An interesting study on the current economic crisis. Causes, effects and solutions.

 

An Austrian Perspective - The Great Recession of 2008

 

Some sound advice from the text:

 

"Is the Austrian perspective then left with a “do nothing” approach to recessions? At the

level of “stimulus” packages and similar sorts of specific policy interventions, the answer would

be “yes.” But in two other ways the answer is “no.” First, saying that government should do

nothing is hardly the same as saying “we” should do nothing. In fact, recovery from recession

depends upon active and creative entrepreneurship on the part of millions of economic actors.

The Austrian perspective argues that it is they who should be “doing something.” However, that

perspective also recognizes that government policymakers cannot know what it is that all of

those actors should do, so for the entrepreneur-driven recovery process to happen quickly and

effectively, policymakers must refrain from interfering with that process and also take steps to

ensure that policy creates a stable and predictable environment in which those entrepreneurs can

operate. The primary objective for policymakers should be to minimize Higgsian regime

uncertainty and thereby facilitate the countless individual adjustments that are necessary for

recovery to take place."

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