Let me repeat part of what I wrote privately to Aimee and Steve about 
this issue. Mises, following the original neoclassical idea of wealth, 
defined it in terms of the utility from consumer goods, which of course 
is not measurable or even meaningful except insofar as one's goal is to 
evaluate claims that wealth can be increased or decreased in some way. 
What economists currently call "real output" does not correspond to the 
original, or to Mises's idea, of wealth. It is a creation of the 
statisticians. So the idea of a cycle revolving around a trend line of 
real output cannot accurately represent Mises.

Whatever might be the trend in whatever we call economic growth, the 
Austrian theory of the cycle that he proposed regarded the boom as a 
period of malinvestment. This means that whatever meaning we attach to 
the value of the goods and resources that would have existed without the 
malinvestment, the malinvestment would reduce that value below what it 
otherwise would have been.

Doug's says that "Mises has some very clear remarks on the causes of 
long run growth, and its capital accumulation." I would recommend a more 
careful reading. From chapter 28, section 7, of Human Action comes:  
"The idea of capital has no counterpart in the physical universe of 
tangible things." Mises's statements about the amount of capital or 
stock of capital were, so far I as I can tell, highly contextual. To 
apply them to some modern, generally accepted notion of economic growth 
is hazardous.

There are in Human Action some highly contextual statements about how 
net saving characterizes a "progressing economy." But Mises cautions 
readers about attaching any significance to the concept of a progressing 
economy. "The precariousness of these three imaginary constructions is 
to be seen in the fact that they imply the possibility of the 
measurement of wealth and income. As such measurements cannot be made 
and are not even conceivable, it is out of the question to apply them 
for a rigorous classification of the conditions of reality." (chapter 
14)  A closer reading of the context of his remarks on the progressing 
economy show that his main goal in using this concept was to elucidate 
the role of competing entrepreneurs in distributing whatever gains one 
might associate with progress (chapter 15). To actually specify such 
gains or to say anything non-tautological about how they come about was 
not Mises's intention, as I understand him.

Pat Gunning