Steven Horwitz wrote:
> As presented, the graphic does not
> convey the idea that 
> central bank-induced credit cycles lead to worse
> economic performance 
> over time than would have been the case had such
> cycles not been 
> induced.  That is Mises's view and the graphic does
> not make it clear 
> that the growth trend line in an economy subject to
> such cycles would be 
> lower (if not negative) than that of a cycle-free
> economy.



That conclusion does not follow. While it is true that
malinvestment will make 'economic growth lower than it
would have otherwise been, this does not imply that it
is negative. Mises has some very clear remarks on the
causes of long run growth, and its capital
accumulation. If the capital stock is rising, then
production of goods and services rises, and this is
what Mises wrote. If capital rises per worker, then
real wages rise. This is what Mises actually wrote. I
wrote about all this stuff from Mises in a paper I
presented at the HES. The discussant for this paper
was Steve Horwitz...

Doug Mackenzie