The 'time to build' modeling approach of Kydland and Prescott helps resolve an empirical puzzle for the Austrian theory—why elevated investment persists even after a policy change becomes evident—because projects require continual investment to reach fruition rather than a single up-front outlay; Mike Montgomery has applied this technique to show the Austrian story fits better and addresses the objection that investment doesn't look as interest-sensitive as the theory requires.
factualpending
Speaker
Larry WhiteEvidence Quote
“if you take account of the time to build propagation mechanism that it fits the story better”
Created: 6/17/2026, 10:31:20 AM
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