Does the Austrian Theory Fit the Facts Any Better?
Naturally, just because the global-savings-glut hypothesis has some trouble fitting the facts, that doesn’t mean we should completely throw it out. After all, this is macroeconomics, not quantum physics. There’s no such thing as a controlled experiment in the realm of the social sciences, especially when we’re talking about global outcomes. Even so, look at how much better the Austrian theory makes sense of the observations. The following chart shows year-over-year (i.e.
