The  Austrian  Business  Cycle  Theory  (ABC)  provides  a  qualitative  explanation  of  why economies go through ups and downs in terms of national income, production output and labor employment. The theory states that interest and money supply policy distort the time preferences of economic agents. If the monetary authority reduces the interest rate through artificial credit expansion the new economic conditions induce both increased production and consumption. The  framework of  the Austrian  theory depends on  savings  to  fuel  investments, i.e. reduced consumption in order to create increased future consumption. Artificially  induced  expansions  create  a wedge between  these producer  and  consumer preferences, and prolonging of the process widens the gap between the economic state and the free market  equilibrium which  is  long-term  sustainable. When  the  financial  system  eventually is unable to maintain inflation of credit to uphold the economy, there will be abandonment of capital investments, resulting in an unavoidable recession. The purpose of this thesis is to analyze the theory from a short run perspective, using data from  the United Kingdom  economy. The  theory has previously primarily been  tested  in long run perspectives and mainly on the American economy. To achieve the noted a model was constructed based on the description of the theory by economists Hayek and Garrison, members of the Austrian school of economics. To empirically model the ABC theory the ratio between consumption and investment, the intertemporal  resource allocation, was  calculated and used as a dependent variable  in  regressions with money aggregates, credit and interest rate gap as independent variables. The empirical findings give some support to the theory, with a number of those findings directly in favor of the theory. Credit was shown to better explain changes in the C/I ratio than money aggregates, indicating that credit is more directly suited for investments. The coefficient for the interest rate gap, the difference between the natural interest rate and the market interest rate, showed strong significance. Overall differences between economic expansions and recessions were found statistically significant, which lends support to the model.

<p>The  Austrian  Business  Cycle  Theory  (ABC)  provides  a  qualitative  explanation  of  why economies go through ups and downs in terms of national income, production output and labor employment. The theory states that interest and money supply policy distort the time preferences of economic agents. If the monetary authority reduces the interest rate through artificial credit expansion the new economic conditions induce both increased production and consumption. The  framework of  the Austrian  theory depends on  savings  to  fuel  investments, i.e. reduced consumption in order to create increased future consumption. Artificially  induced  expansions  create  a wedge between  these producer  and  consumer preferences, and prolonging of the process widens the gap between the economic state and the free market  equilibrium which  is  long-term  sustainable. When  the  financial  system  eventually is unable to maintain inflation of credit to uphold the economy, there will be abandonment of capital investments, resulting in an unavoidable recession. The purpose of this thesis is to analyze the theory from a short run perspective, using data from  the United Kingdom  economy. The  theory has previously primarily been  tested  in long run perspectives and mainly on the American economy. To achieve the noted a model was constructed based on the description of the theory by economists Hayek and Garrison, members of the Austrian school of economics. To empirically model the ABC theory the ratio between consumption and investment, the intertemporal  resource allocation, was  calculated and used as a dependent variable  in  regressions with money aggregates, credit and interest rate gap as independent variables. The empirical findings give some support to the theory, with a number of those findings directly in favor of the theory. Credit was shown to better explain changes in the C/I ratio than money aggregates, indicating that credit is more directly suited for investments. The coefficient for the interest rate gap, the difference between the natural interest rate and the market interest rate, showed strong significance. Overall differences between economic expansions and recessions were found statistically significant, which lends support to the model.</p>

Made available in DSpace on 2016-06-02T19:35:55Z (GMT). No. of bitstreams: 1 5811.pdf: 1336683 bytes, checksum: bf0fc9f43afb30253063d1c20082bc99 (MD5) Previous issue date: 2014-02-27 / Financiadora de Estudos e Projetos / The central objective of this study is to clarify the technocratic formulations used by capitalism through the use of technical and scientific knowledge of the material world to intervene in the institutional structures of society with a view to organisation of socioeconomic system, especially in times of crises. Study the technocratic in the different historical contexts propositions involving the structures of society, the State and education in capitalist reality demanded theoretical references of sociology, economics, education, economic sociology, political economy, history and economics of education. We restrict our analysis to the compendium of universe theories that we believe are the more substantial for the realization of research, in order to identify the principles and/or foundations which characterized the technocratic proposals to the directors of the company and its implications for education. We divided the study in four different moments: in the first stage, we resorted to the writings of Saint Simon and Thorstein Veblen to characterize the technocracy in their socio-political aspects; in the second stage, we focus our analysis on the studies of Max Weber and the propositions of Frederick Taylor and Henri Fayol for expressing politicaladministrative character of the technocracy; in the third stage we analyze the theses of John Keynes and theories of Theodore Schultz to express political and economic purpose of interventionist technocracy; in the fourth stage, we examine criticisms and proposals of August Von Hayek and Milton Friedman to characterize the technocracy in his liberal political and economic disposition. We conclude that the fundamentals technocratic constitute the set of devices and strategies rationally constructed by highly skilled intellectuals in their fields of expertise to mediate, monitor, control and direct the society and their relationship dynamics, considering aspects and economic, political and social conditions in accordance with the needs determined by the historical realities that characterize the capitalist universe. / O objetivo central deste estudo é o de explicitar as formulações tecnocráticas utilizadas pelo capitalismo, mediante o emprego do conhecimento técnico e científico do mundo material, para intervir nas estruturas institucionais da sociedade, tendo em vista a (re)organização do sistema socioeconômico, sobretudo em período de crises acentuadas. Estudar as proposições tecnocráticas nos distintos contextos históricos que envolveram as estruturas da sociedade, o Estado e a Educação na realidade capitalista exigiu referenciais teóricos da sociologia, da economia, da educação, da sociologia econômica, da economia política, da história e da economia da educação. Limitamos o nosso universo de análise ao compêndio das teorias que entendemos serem as mais substanciais para a realização da pesquisa, na perspectiva de identificar os princípios e/ou fundamentos que caracterizaram as propostas tecnocráticas para a administração da sociedade e suas implicações para a educação. Dividimos o estudo em quatro momentos distintos: no primeiro estágio, recorremos aos escritos de Saint Simon e de Thorstein Veblen para caracterizar a tecnocracia em seus aspectos político-sociais; no segundo estágio, concentramos as nossas análises nos estudos de Max Weber e nas proposições de Frederick Taylor e de Henri Fayol, para expressar o caráter políticoadministrativo da tecnocracia; no terceiro estágio analisamos as teses de John Keynes e as teorias de Theodore Schultz, para exprimir a finalidade político-econômica intervencionista da tecnocracia; e no quarto estágio, examinamos as críticas e proposições de August Von Hayek e de Milton Friedman, para caracterizar a tecnocracia em sua disposição políticoeconômica liberal. Concluímos que os fundamentos tecnocráticos constituem o conjunto de dispositivos e estratégias racionalmente construídos por intelectuais, altamente especializados em seus campos de atuação, para mediar, fiscalizar, controlar e dirigir a sociedade e suas dinâmicas relações, considerando os seus aspectos e condições econômicas, políticas e sociais, em função das necessidades determinadas pelas realidades históricas que caracterizam o universo capitalista.