The Guardian Comment is Free site yesterday put up a short piece they had requested from me explaining what the Austrian Theory of Business Cycles is. Of course, all such pieces are subject to some editing by the site managers. Unfortunately one of their amendments was to change my last sentence so that it says that the Austrian theory of business cycles might be borne out by recent events. Obviously I don't believe this at all - I am an orthodox economist, operating with the Rationality and Equilibrium axioms of the mainstream economic theory paradigm, and when I seek to deviate from these I have argued vigorously and repeatedly that there should be explicit mathematically formulated alternative models, such as those of bounded rationality. The interest of mainstream economists in the Austrian theory of business cycles is not that there is any possibility of its being correct as it stands. It's more like a western biochemist investigating a Chinese holistic medical remedy to see whether a orthodoc scientific account can be offered of how it works (if it does).
I guess that's an instance of the perils of Grauniad editing...
