… is from Bob Murphy’s blog post “Why ‘Potential GDP’ Loads the Keynesian Deck” (original emphasis):
Yes, this is a decent way to analyze the world, assuming that the economy is fundamentally suffering from a lack of demand and that government spending would fill the gap. But if the Austrian story were correct–that the economy had years of unsustainable, phony prosperity that actually ate away the underlying capital structure–then the above [aggregate-demand-centered] analysis is totally misleading.
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