Murphy's post and Capital Theory

Krugman wants me to read it. It says:

Krugman and Cowen Ridicule the Austrian "Hangover" Theory

I think we have good, numerical research that a default spiral is running through Europe and America.

Is this a hang over?
It is regional economies being hit with default or near default in a spiral fashion. Call it what you want.

Did this happen because of low interest rates?
By whatever banking model , we used debt to extend and pretend ever since Reagan. Reagan started the debt build up because he was president of a large central government and they cannot see anything except extend and pretend. The bailouts helped America get past information shocks.  The only political duo that came close to correcting this was Clinton/Gingrich.

Is there a math to describe the unwinding?
Yes, heteroscedasticity. Data shows the rapidly expanding variance on many measures of leverage, that heteroskedasticity can be modeled as a polynomial of expanding variation. The Theory says the economy is changing the complexity level of the spontaneous order.  Yes, we have a math.

How do we know Reagan started the debt binge because of information shock?
Because an observer could have sat around in the 80s and pointed out that Reagan was a goddamn communist even though Republicans all around him were calling him he saint of libertarianism. When you see that kind of disconnect you have a sure sign of information shock.  History shows most great recessions are caused by information shock.
Are all these spirals caused by banking?
Absent banking would humans invariably find some other political dictatorship, or war to do the spiral?   Scary huh?
How is the math different from stochastic math?
We use histograms, they use smoothed distributions.   Otherwise we both use the Hilbert Space concept.  In other worlds, the difference is not that big.  In human economies we have the Darwin Revulsion effect, humans do not want to be modeled accurately.  But our model includes the amount of imprecision humans prefer. Austrian math models humans with the same measurement norm humans  actually use, as near as I can tell.