Wednesday, August 21, 2013

The Evidence for Hayek the Stable MV Theorist is still Feeble

Lawrence H. White responds to me here and cites three sources from Klausinger (2012: 34, n. 123) as evidence for Hayek’s alleged support for a stable MV.

Let us review the sources:
(1) First, no precise reference is given for Geldtheorie und Konjunkturtheorie (1929) for where Hayek “advocated a constant M instead of MV.” Furthermore, it does not necessarily even follow that Hayek supported central banks meeting demand for high-powered money, just because he “advocated a constant M.”

(2) Secondly, yet again no specific reference is given for Investigations into Monetary Theory (1925–1929), which, anyway, was never even completed or published (Klausinger 2012a: 45, n. 1) by Hayek.

(3) Thirdly, we have a reference to Prices and Production.

But I have already cited the relevant passage from this work and demonstrated that it does not say what the free bankers think it says:
“Hayek the Stable MV Theorist?,” August 13, 2013.
All in all, the idea that Hayek was a “stable MV” man before 1932/1933 looks fairly tenuous to me. Maybe there is some convincing evidence that he was, but I have not yet seen it.

Klausinger, Hansjoerg. 2012. “Introduction,” in Hansjoerg Klausinger (ed.). The Collected Works of F. A. Hayek. Volume 7. Business Cycles. Part I. University of Chicago Press, Chicago.

Klausinger, Hansjoerg (ed.). 2012a. The Collected Works of F. A. Hayek. Volume 8. Business Cycles. Part II. University of Chicago Press, Chicago.

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