Tuesday, June 28, 2016

Does Capitalism Cause Recessions?

Why do recessions occur? This question divides free market economists. After recently blogging on the classical conception of the business cycle, in which I described how “classical” economists believed that economic crashes are due to production errors, a commenter linked to an alternative perspective which suggests that recessions are the result of central banking. While this is true some of the time, it doesn’t explain why recessions plagued the economy before the introduction of the Federal Reserve (Fed) in 1913.