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Advocate

Someone who helps and supports another person. An advocate will "take sides" and promote his or her client's view or interests.

Question: How would a austrian economists advocate closing a recessionary gap? I know that Austrians are ones to advocate the government keeping out of the market. However, since the business cycle has begun because of government established inflation, how would an austrian advocate getting out of the recession? I'm guessing they would advocate the government halt any sort of intervention and allow it to adjust itself. Am I right?

Answer: Austrians view entrepreneurship not just capital as the driving force in economic development. However they believe that money is not neutral in the short run so do not fundamentally disagree with monetarist about the cause of recessions. I do not think most Austrians are doctrinaire about the FED and government invention but many doubt that the Fed can time policy correctly.. Alan Greenspan was influenced by their views.

 


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