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