Libertarian Jackass

"Life is short, but truth works far and lives long; let us speak truth." -- Schopenhauer

Sunday, October 19, 2003

Skyscraper in Taiwan

Kid Q posts on the new monstrosity adorning Tapei's skyline here. Dr. Thornton presented a working paper at the Mises Institute last summer exploring the link between skyscraper construction and business cycles. Basically, plans for a skyscraper are announced and construction commences during the "boom phase" of the business cycle. Some evidence: the skyscraper at 40 Wall in 1929 (71 stories), Chrysler Building in 1930 (77 stories) and the Empire State Building in 1931 (102 stories), followed by America's tragic Great Depression. The implication is that a central bank-produced capital-based boom occurred, with the skyscrapers as distinguishing characteristics, and later bank failures and bankruptcies followed in the bust phase. Thornton notes this theory is based on the work of Richard Cantillon's exploration of the real effects of resource allocation as a result of new money creation in the economy. Still looking for that Taiwanese money supply data . . .

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