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richardhutnik on 08 August 2011
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Kasz216 said:
richardhutnik said:
mrstickball said:
An example of a non-government created bubble would be the .com bubble that burst in 2000. It was due to many, many over-valuations of internet based IPOs. Wasn't created by the government.

The Austrian school argues that every bubble is actually created by government interference with markets, in the sense that the central bank ends up making interest rates too low, and causes malinvestment to happen, which then drives a bubble.

They don't suggest EVERY bubble is created by that... just the really bad ones that have happened so far.

Afterall, bubbles existed before there was government interfernece within markets.

The difference was they were more frequent but smaller.

Aside from which, the main point of Austrian economics is that it's stupid to attribute any one thing to another thing, because economics is inherently untestable.

It's treated more as a hard science like chemistry or phsycis when the reality is, that the basis of economics is in fact people who are individual agents who all act differently to change.

To study why the economy is acting how it is, one must study the individual.

And that main point of Austrian economics you bring up, puts it on very shaky grounds.  It puts economics in the realm of personal preference and opinion, with everyone reaching their own conclusions that placate them, rather than being able to at least have a degree of probabilistic causality, which can say this or that can cause things to happen or not happen.  

I also have to wonder, if economics is inherently untestable, then how can one even speak of "The Laws of Economics"?