Hayek’s Theory of Money and Cycles

In adopting the view that relatively few of our readers argon provoke in the history of economic thought any more(prenominal),1 the editors of champion journal have allowed tyroisms of the work of Friedrich Hayek to remain unanswered. That situation is now redressed, by courtesy of the editors of this journal. Three significant assertions were made; namely, that Hayek (a) switched his focus from pecuniary policy to monetary regimes: However doubtful its forecasts, The Denationalisation of Money had the virtue of boldly reconceiving the debate over monetary policy as a more fundamental debate over monetary regimes (White 1999, p. 117); (b) toss away an antecedent position: In Denationalisation, however, Hayek (1978a, pp. 6470) argued for the coordinating properties of price-level stability or null inflation in final output prices. He abandoned his earlier position that preventing nominal output prices from falling would systematically create intertemporal misallocation (White 1999, p. 117); and (c) denied the concrete relevance of his business-cycle theory: At the end of his career, surprisingly switching from critic to advocate of consumerprice stabilization, Hayek was compelled to deny the practical relevance of his business-cycle theory (White 1999, p. 118).

These assertions are now addressed in the course of a revue of Hayeks monetary theory of business cycles, which allows Hayeks give retrospective and reappraisal to be placed in their proper context. In particular, as Hayek gains political influence in later years, he more obviously tailors his THE QUARTERLY JOURNAL OF AUSTRIAN ECO noICS VOL. 8, NO. 1 (SPRING 2005): 314 3 ARTICLES message to his audience. For example, with his later examination of monetary distortions in the context of the labor market, trade unions, and unemployment, he is more on the alert to engage the attention of a readership who, by then, had become well-versed in monetarism and Phillipss curves. It emerges that... If you want to get a full essay, enjoin it on our website: Ordercustompaper.com

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