Why I may be an Austro-Keynsian

Arnold Kling describes it here. Read the whole thing, it's short. Then we have my comment, reproduced just for you:

It's interesting that Horowitz departs from the standard Austrian
model. Traditionally, it's the increase in the money supply that is the
culprit for Austrians. For Horowitz, it's inflation, whether or not it
was caused by an increase in the money supply. I think this allows him
to avoid Caplan's substantial theoretical critiques of the Austrian
theory of the business cycle. But your right about it needing to be
integrated into a general theory of fluctuations, which takes into
account both Keynes and Schumpeter.

And the question, does Horowitz's version of the ABCT hold water? In particular, does it escape Caplan's criticisms of the traditional ABCT, available here?

I've long had the inuition that the Austrians were on to something even if the formal statement of their theory of fluctuations didn't quite work (Caplan's criticisms are pretty good). Perhaps this is it. By the way, I hesistate to call Horowitz's version "Austrian" because of the difference, but the emphasis on coordination perhaps merits the label, lets just be careful to keep the two versions straight. Perhaps big-A Austrian for the Mises-Hayek theory and little-a austrian for Horowitz's version?. One unAustrian implication which Kling mentions: deflation screws with the coordination process just as much as (according to Kling, more than) inflation.

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Money is subject to demand as well as supply...

Austrians may often focus on money supply as the source of inflation simply because it's the most common, visible source of inflation -- and the Fed's ongoing role in making that happen is particularly vexing for those who don't favor centralized intervention into markets.

But I think many Austrians would also readily admit that inflation can happen by other means, as a friend of mine points out here...

I'm a little late getting to this one, but here goes

As I read the theory, Austrians focus on the money supply because it takes an increase in the money supply to kick off an Austrian boom/bust cycle. It can all get very confusing because when Austrians say inflation they mean "an increase in the money supply" and when everyone else says inflation they mean "an increase in the general price level." Austrians would certainly allow that the price level can be altered through means other than changes in the money supply, but traditionally, price level changes don't cause Austrian cycles, money supply changes cause Austrian cycles. As a testament to this, Hulsmann insisted, during my Mises U summer tenure, that deflation was always benign. Horowitz is opting for the former, which is what struck me, and if he's right, deflation is not necessarily benign.