Tuesday, October 9, 2012

Some Critical New Work on the Austrian Business Cycle Theory

A short post.

I note three interesting articles that have come to my attention that provide criticisms of the Austrian business cycle theory:
Vasséi, Arash Molavi. 2010. “Ludwig von Mises's Business Cycle Theory: Static Tools for Dynamic Analysis,” in Harald Hagemann, Tamotsu Nishizawa, Yukihiro Ikeda (eds.). Austrian Economics in Transition: From Carl Menger to Friedrich Hayek. Palgrave Macmillan, Basingstoke. 196–217.

Vasséi, Arash Molavi. 2010. “The Foundation of Ludwig von Mises’s Business Cycle Theory: Real Analysis as a Chain of Tautologies,” SSRN paper, June 5, 2012.

Repapis, Constatinos. 2011. “Hayek’s Business Cycle Theory during the 1930s: A Critical Account of its Development,” History of Political Economy 43: 699–742.
The first two criticise Mises’s business cycle theory from the perspective of neoclassical economics, so do not interest me as much as the third. The second is also a revised version of the first.

The third paper is a critical survey of Hayek’s trade cycle theory in the 1930s, including some useful criticisms of Hayek’s assumptions about capital goods, and is of much greater interest to me than the first two. I will have more to say about the third article in future posts.

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