Risk and Austrian business-cycle theory: Rejoinder to Cowen

Cowen and I agree that rational-expectations theory is unrealistic and that risk is difficult to quantify. However, we continue to disagree about the riskiness of consumption as opposed to investment. Since more investment mi ght lead to a recession if investment is relatively risky, Cowen's use of r ational-expectations theory to buttress the Austrian school's claim that ma rket economies can shift toward relatively more investment without experien cing macroeconomic disruption remains suspect.