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Hayek, Austrian Business Cycle Theory, and The Fatal Conceit

  • Alan EbensteinEmail author
Chapter
Part of the Archival Insights into the Evolution of Economics book series (AIEE)

Abstract

Austrian business cycle theory is Hayek’s business cycle theory - Hayek thought that his work in business cycle theory ultimately underlay The Fatal Conceit: The Errors of Socialism (1988). Though Hayek’s business cycle theory is sometimes ascribed to von Mises or conflated with Mises’s thought, this is not accurate. Mises’s theory of a business cycle was more that government-induced credit expansion would ultimately result in inflationary collapse; while Hayek’s argument was that government-directed interest rates held below the natural rate of interest would misshape the structure of production. The idea that prices are nonverbal signals communicating information was perhaps Hayek’s greatest contribution

Keywords

The fatal conceit Mises Interest rates Austrian business cycle theory 

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  1. 1.University of CaliforniaSanta BarbaraUSA

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