30
Mar
2009
Another Reply to Krugman’s "Hangover Theory"
For those atheist readers on the verge of abandoning this blog, I humbly offer this response to Krugman’s critique of the “hangover theory” of recessions. An excerpt:
In the present article, I will set the record straight. Krugman’s theoretical criticism of (what he dismissively calls) the “hangover theory” of recessions is silly, and his empirical test is also a poor one. Once we set up a more appropriate test, the “hangover” theory — i.e., the Mises-Hayek explanation — passes with flying colors.
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