One of the most important objections to the Mises-Hayek business cycle theory is the rational expectations critique. The debate between supporters and critics of the Mises-Hayek theory has not paid sufficient attention to the problem of differences in expectations and the market share in the...

Salter and Luther (2016) argue that the Austrian theory of the business cycle (ABCT) can be interpreted as one where consumers and entrepreneurs with rational expectations make erroneous investment decisions driven by misperceptions regarding real vs. nominal shocks. Although we are sympathetic...

Since Hayek's pioneering work in the 1930's, the Austrian business cycle theory has been presented as a disequilibrium theory populated by less-than-perfectly rational agents. In contrast, we maintain that (1) the Austrian business cycle theory is consistent with rational expectations and (2)...