In an interesting interview below, James Galbraith speaks on the role of government, the way it can be captured by the private sector, but also how it can play a crucial role in regulation and supporting the private sector.
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LK,
ReplyDeletein your post summarising the problems with the ABCT you write:
"In alternative versions of the ABCT where the fundamental dis-coordination mechanism is presumed to be the role of “false money profits,” it is assumed that prices of goods do move flexibly in response to demand changes and induce shifts in money profits of businesses, which then cause malinvestments as capitalists exploit unsustainable profit opportunities"
http://socialdemocracy21stcentury.blogspot.co.uk/2013/08/why-austrian-business-cycle-theory-is.html
This seems to be the argument which Bob Murphy tries to make in his paper on Hayek/Sraffa, after he acknowledges that the usual ABCT story about 'the natural rate of interest' is wrong. Do you agree?
Where else is this 'alternative version of the ABCT' laid out?
Galbraith's new book is very good. I'm going to write a review of it hopefully.
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