"It is the idea that slumps are the price we pay for booms, that the suffering the economy experiences during a recession is a necessary punishment for the excesses of the previous expansion"The other day, Steven Horwitz, one of the leading advocates of ABCT offered the following analogy for economics:
"the mistake is drinking too much and being hungover is the correction."(Steven Horwitz is the secretary and webmaster for the Society of the Development of Austrian Economics and manages to get letters to the editor published in the Watertown Daily Times. Myself, I read the Lowville Journal & Republican if I want to know who is growing the largest pumpkin and who has been visited over the weekend by their children away at college.) I think my critique of ABCT goes more into the nuts and bolts of the theory.
Elsewhere, Krugman adopts a Post Keynesian point:
"I should also point out this, in [Robert] Barro’s article:'John Maynard Keynes thought that the problem lay with wages and prices that were stuck at excessive levels. But this problem could be readily fixed by expansionary monetary policy, enough of which will mean that wages and prices do not have to fall.'Is it too much to ask that someone criticizing Keynes actually, you know, read Keynes — at least enough to know that he devoted a whole chapter to explaining why a fall in wages would not expand employment?"