Jonathan Catalán, “A Thought on the Business Cycle, Economic Thought,” Economic Thought, 8 March, 2013.My immediate question is: in previous posts, Catalán implies that he does not think that there is a real world tendency towards a general equilibrium (GE) sstate, whether towards a Walrasian GE or Mises’s “final state of rest” (although the actual equilibrium state is never attained, of course).
Yet the Hayekian ABCT requires a “transition between equilibria” - that is, a real world tendency towards an equilibrium state for the theory to work.
But there is a gaping hole here: if you do not think that real-world market economies have a tendency towards a general equilibrium state, then what is the use of the theory?
The Hayekian ABCT is just another equilibrium theory, and once one accepts that equilibrium theory is irrelevant for the real world, it follows logically that any ABCT that requires and posits a “transition between equilibria” in real market economies is also irrelevant.
