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vit_rA short description of the theory can be found in "An Austrian Theory of Business Cycles", by Ben Best
If this is true, we are nearing something like 1930s.
... Within the Austrian School there is general agreement that business cycles are primarily caused by the periodic credit expansion and credit contraction of central banks. ...
...
I do not believe that business cycles would be a feature of a free market economy. Periodic massive misallocations of resources leading to unsustainable booms and recessions would not occur in an economy in which most of the forecasting & resource-allocation was done by entrepreneurs rather than bureaucrats. But there is no free market in money or short-term interest rates anywhere in the world -- central planning and control of money & short-term interest by governments is universal. All contemporary currencies are the product of government fiat, banking is controlled by government central bankers and there is severe government regulation of the financial sector.
If this is true, we are nearing something like 1930s.
