The most prominent previous versions of Austrian Business Cycle Theory (ABCT) are analyzed with the conclusion that, while containing interesting insights, were excessively aggregative and based on confusing constructs. This work develops a more realistic version of ABCT centered on the actual...

Giménez Roche (forthcoming) attempts to restate Austrian Business Cycle theory (ABCT) through adding additional transmission channels to the interest rate channel traditionally emphasized by Austrian business cycle theorists. The key idea is that the business cycle is not sparked by a credit...

Austrian Business Cycle Theory (ABCT) purports to explain recurrent clusters of unsustainably lengthy investment projects following episodes of credit expansion by central banks. In this paper, we show that doing justice to the insights behind ABCT requires a disequilibrium-based restatement of...

The dominant account of the Great Recession in the United States' economy links the economic decline to the preceding boom in the sector of single-family housing and related financial markets. Even the existing explanations of the crisis in terms of the Austrian Business Cycle Theory (ABCT) have...

Marginalism is widely considered to be the cornerstone and an indispensable part of the modern economic theory but is it really compatible with what we know about economic realities? In this paper, we attempt to demonstrate that marginalism severely distorts them without providing offsetting...

The central topic of F.A. Hayek's writings at least since 1945 has been what he referred to as the "knowledge problem". The modern phenomenon of the so-called behavioral paternalism seems to be very relevant to the Hayekean concerns about knowledge. However, a purely Hayekean critique seems...

Young (2011) proposes a sophisticated approach to confronting the Austrian Business Cycle Theory with evidence. However, this approach is ultimately inconsistent with the central prediction of the theory about the presence of excessively roundabout investment projects turning sour on the eve of...

K. Foss et al. (2007) attempt to build a theory of an entrepreneurial firm using the notion of experimentation with heterogeneous capital assets. They explain the role of an entrepreneur by the impossibility to sell the entrepreneurial services in the labor market due to the difficulty to...