Unveiling the Volatile Nature of Austrian Business Cycles: Impactful Insights
The Austrian Business Cycle involves economic ups and downs that last for varying lengths of time. Recessions have high unemployment and low productivity. The study from 1970 to 2004 shows that supply-side shocks like technology play a big role in causing these cycles. The researchers looked at data from Austria to see how these cycles work and found that prices and real wages are important factors. The study also compared a model to the real data and found similarities.