Home > Austrian School > Is housing a “higher order” good under ABCT?

Is housing a “higher order” good under ABCT?

Austrian Business Cycle Theory applied to the housing bubble.


There’s real ambiguity here.  You could argue housing is “just” a consumption good.  But within the debt-based monetary system, it also possesses strong “capital good” value as a store of value for households looking for a refuge from relentless monetary debasement.

That “store of value” aspect to the asset makes it a possible target for “bubble-dynamics” from fractional reserve banking’s recursive lending ballooning the pricing structure.

Basically anything that can be used as security for a loan can now be subject to a bubble. 

Call it the new ABCT of the Ponzi-cycle.

Categories: Austrian School
  1. Alice
    December 6, 2009 at 9:16 am

    You need a view comments link Abom!

    • December 6, 2009 at 12:58 pm

      Sorry Alice I don’t understand. You should be able to view all comments. I haven’t restricted anything. I’ve turned off “pingbacks” (links to other entries) because they were getting too numerous.

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