The Austrian business cycle theory argues that efforts to artificially suppress interest rates below natural market levels fuel an unsustainable economic boom. When the inflationary credit expansion inevitably slows, the façade of illusory prosperity unravels as the widespread malinvestments and errors made during the boom are exposed and must be corrected. This bust phase acts as an unavoidable period of painful but necessary realignment and market correction.
In contrast to mainstream beliefs that monetary authorities can successfully iron out business cycles via interventionist policy, the Austrian school of thought recognizes such efforts to stimulate growth as inherently counterproductive and ultimately destructive. Inflationary booms inevitably sow the seeds of their own destruction and systemic collapse. Fear the booms, not the busts.