This project is intended to capture the idea of capital structure, as presented in the works of Ludwig von Mises, Ludwig Lachmann, Israel Kirzner, and others.
The project is being worked on by Manxueying Li.
Austrian Business Cycle Theory(ABCT) developed by Austrian school of economics views business cycle as a result of artificially low interest rate leading to the imbalance between saving and investment. Low interest rate stimulates business investment because of the lower cost of borrowing money. More investment bid up prices for capital goods increasing the cost of production along with the false information about sufficient recourse cause the uncompleted production of final products which are not capable of turning into profit. As a result, companies are not able to sell their product and a lot of resources are being wasted leading to an economic downturn.