Quarterly Journal of Austrian Economics
Response to a Review of Money, Banking, and the Business Cycle
Abstract: Shawn Ritenour provides a review of my two-volume book Money, Banking, and the Business Cycle in the Winter 2016 issue of this journal. In his review, he provides a number of criticisms of the book and offers some compliments of the book as well. While I appreciate the compliments, most of the criticisms are not valid. In this response, I explain why it is that more money in the economy leads to more profits. I also show the difference between making a distinction between the rate of profit and the interest rate and saying they are independent of each other. Furthermore, I discuss the effect of changes in interest rates versus changes in the rate of profits. I discuss criticisms of Objectivist philosophy as well.
KEYWORDS: Austrian school, business cycle, net consumption-net investment theory of profits, profit, interest, Objectivism
JEL CLASSIFICATION: E14, E32
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Cite This Article
Simpson, Brian P., "Response to a Review of Money, Banking, and the Business Cycle," Quarterly Journal of Austrian Economics 20, no. 3 (Fall 2017): 255–65.