"Central banks are facing an unprecedented test in the wake of the credit crisis. We briefly outline prevailing theoretical frameworks and argue that central bankers effectively have a choice between three separate frameworks: Vienna, Cambridge and Chicago. Despite Austrian economics being the...

Contemporary economic commentators have a habit of dismissing Austrian business cycle theory on the grounds that the implications for policy responses are unconvincing. Often the 'Austrian' position is misunderstood. But even if we wish to draw on other schools of thought to understand...