Ludwig von Mises seems to be something of an outlier within the Austrian school when it comes to capital – though his position is clearly foreshadowed in a neglected article by Carl Menger (1888). In this paper we examine Mises's view on capital and suggest that it constitutes a bridge between...

In this paper I revisit the question of coordination – of plans by prices and other social institutions. Prices contain ambiguous information that requires interpretation. How are they, in spite of this, able to coordinate plans and actions. The answer given in this paper is that they are not...

We agree with the recommendations of Hodgson (2014) and Braun (2015) to shift the focus away from capital as physical production-goods back to the common-sense and historical understanding of capital as money-borrowed for the purpose of acquiring productive resources to produce value. Much...

Following financial concepts like duration and economic value added (EVA®) we estimate the impact of interest rate movements on firms that are more and less roundabout. We find that firms that are more roundabout, that is, work with expected cash-flows with higher duration, are more sensitive...

The perennial question ‘What is Capital' has been getting some attention recently. Although the distinction between capital as a financial construct and capital as a collection of physical production-goods is well known, we argue that the former concept is undepreciated. The two concepts are...

Austrian capital theory tried to capture the intuitive and basically undeniable importance that time plays in economic life, but arguably was diverted down a blind alley with Böhm-Bawerk's average period of production, a purely physical measure of 'roundaboutness' -- the length of the...

In this paper we study financial foundations of Austrian business cycle theory (ABCT). By doing this we (1) clarify ambiguous and controversial concepts like roundaboutness and average period of production, (2) we show that it has strong financial foundations (consistent with its microeconomic...

We repeat the mistakes of history because of the neglect of history, the imperfections of memory and the complexity of social situations. I begin with a discussion of the first two and then turn to the third. After discussing the meaning and significance of complexity, I discuss the causal...

We apply the EVA terminology to the concepts of roundaboutness and average period of production in capital theory. By doing this we show that these terms have a clear and well understood financial interpretation. A financial application to capital theory helps to clarify obscure and...

This paper is a review essay of the latest volume of The Collected Works of F.A. Hayek, entitled 'The Market and other Orders.' The paper examines the development of Hayeks' ideas about order, as manifested in the essays collected in this volume. Issues examined include: Hayek's accounts of the...