Hayek-Keynes Debate - Lessons for Current Business Cycle Research

Author: Cochran, John
Glahe, Fred
This work examines the Hayek-Keynes debates on business cycle theory and argues that the key issues at the heart of the controversy in the areas of money, interest, and capital theory are much neglected in current macroeconomic modeling. A reexamination of these unsettled issues could enhance our understanding of the operation of a monetary production economy and enable economists to make better policy recommendations.

“I found this book to be a very worthwhile addition to the existing literature on business cycles. Although most of the text is devoted to Hayek and Keynes, there are brief but insightful presentations of classical theory, monetarism, real business cycles, and rational expectations. .. . . The next time I teach a university course on business cycles I intend to use this book as the main text.” – Larry Sechres in Ideas On Liberty


“Nobelist von Hayek was one of the few economists who anticipated the great crash of 1929. For the happy few who understood Hayek’s business cycle analytics, the Asian crisis of 1997-98 was fully anticipated, too. Cochran and Glahe have now made von Hayek’s voluminous and complex works accessible as a coherent whole to students of business cycles. This exhaustive and thorough treatment of von Hayek on cycles is a ‘must-read’.” - Steven H. Hanke

“In my 18 years of academic career I have not seen a book that makes Austrian Economics such a main topic of discussion and exploration. The authors have made valuable and worthwhile comparison of all branches of economic thought. . . a significant contribution to the knowledge of economics. . . it will stand out in the book collection of economists in the US and abroad.” – Kishore G. Kulkarni

Table of Contents

Table of Contents:
Foreword by Roger W. Garrison; Preface
Part I: Introduction
1. Introduction to the Drama
Part II: Hayek, Keynes, and Classical Monetary Theory
2. Monetary Theory and Coordination
3. The ‘Wicksell Connection’
4. Keynes and the Quantity Equations
5. Hayek and the Theory of Prices
Part III: An Interpretation of the Hayekian
6. Methodology of Trade Cycle Theory
7. The Foundations of a Theory of the Trade Cycle
8. Capital Theory and the Theory of the Trade Cycle
9. The Self Reversing Nature of a Monetary Change
10. Crisis, Unemployment, and Policy Implications
11. The Use and Abuse of Equilibrium in Business Cycle Theory: A Praxeological Approach
Part IV: The Drama Revisited and Updated
12. The Hayek-Keynes Debate: Lessons for Contemporary Business Cycle Theorists
References, Index