The Austrian Theory of the Business Cycle
About this episode
Patrick Newman discusses the Austrian theory of the business cycle and its implications for economic policy.
Patrick Newman lays out the Austrian theory of the business cycle—one of the school's signature contributions. He first shows how genuine savings drives sustainable growth by lengthening the structure of production, then explains how central-bank credit expansion counterfeits that process: pushing interest rates below their natural level sends a false signal, luring entrepreneurs into long-term investments that real resources can't sustain. The result is a boom that must end in either a cleansing bust or runaway inflation—and, Dr. Newman argues, a modern policy of propping up the malinvestment that has defined the era since 2008. Recorded at the Mises Institute in Auburn, Alabama, on July 21, 2026. Mises University is the world's leading instructional program in the Austrian School of economics, and is the essential training ground for economists who are looking beyond the mainstream.
People in this episode
Guest: Patrick Newman
Topics covered
- Austrian economics
- business cycle
- central banking
- malinvestment
- economic growth
Keywords
- Austrian theory
- business cycle
- central bank
- interest rates
- malinvestment
- economic policy
- sustainable growth
Mentioned in this episode
Organizations: Mises Institute
Places: Auburn, Alabama
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