Empirical Research
Empirical research by economists regarding the accuracy of the Austrian business cycle theory has generated disparate conclusions, though most research within mainstream economics regarding the theory concludes that the theory is inconsistent with empirical evidence. In 1969, Friedman argued that the theory is not consistent with empirical evidence and using newer data in 1993 reached the same conclusion. However, in 2001, Austrian economist James P. Keeler argued that the theory is consistent with empirical evidence and in 2006, Austrian economist Robert Mulligan also argued that the theory is consistent with empirical evidence.
According to most economic historians, economies have experienced less severe boom-bust cycles after World War II, because governments have addressed the problem of economic recessions. Many argue that this has especially been true since the 1980s because central banks were granted more independence and started using monetary policy to stabilize the business cycle, an event known as The Great Moderation.
Read more about this topic: Austrian Business Cycle Theory
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