Short and Long Period-of-Provision Goods During an Austrian Trade Cycle

This essay presents a model of the effects of an increase in the quantity of money introducedthrough loan markets under rigid assumptions. It traces those effects through loan markets and resourcemarkets. Its main contribution is its focus on two different consumer goods industries: a durable goodindustry with a long period of production and a perishable good industry with a short period ofproduction. It is especially concerned with the theory’s deduction that there will be a shortage of thelatter good during the contractionary phase of the cycle. Short and Long Period-of-Provision Goods11 Identifying the Austrian Trade Cycle in the Historical Data J. Patrick GunningDepartment of EconomicsFeng Chia University100, Wenhwa Road, SeatwenTaichung, Taiwan 407R.O.C.Email: [email protected]: http://knight.fcu.edu.tw/~gunning/welcome.htmhttp://www.constitution.org/pd/gunning/welcome.htm