Ep. 508 I THE ABCT AND THE DEMAND FOR MONEY—PLUS THE ‘STABLECOIN EFFECT’

In this podcast I explain the role of money demand in the Austrian Business Cycle Theory (ABCT). I would like to present the results upfront: (1) Changes in money demand do not trigger a boom-bust cycle, regardless of whether they are caused by a change in the demand for present goods and/or a change in people’s time preference. (2) The greater the interest-rate sensitivity of money demand in the ABCT, the smaller the effect that changes in the demand for money (due to changes in time preference) have on savings, consumption, investment, and the market interest rate. (3) If the demand for money declines as the demand for stablecoins increases, the ABCT diagnoses a boom-bust cycle, even if people’s time preference remains unchanged. — A talk held at the 10th Madrid Conference on Austrian Economics 21—23 October 2026, recorded on 22 October 2026.