Explaining the Great Recession




LearnLiberty Audio Podcast show

Summary: Professor Tyler Cowen explains that the Great Recession was the result of a number of different problems. While many economists tend to be dedicated to one particular model of downturns, Prof. Cowen finds evidence that elements from many different models played a factor in the recent recession. He briefly outlines how the following models could be used to explain, in part, the causes of the Great Recession: Keynesian Business Cycle Theory Real Business Cycle Theory Austrian Business Cycle Theory Monetary Policy As Prof. Cowen says, 'When you have Keynesian, aggregate demand, monetarist, Austrian, real business-cycle theories all pushing in the same direction, first an initial boom and then later a subsequent bust, and the economy has a lot of distinct problems, that's exactly when you get the biggest messes.'