In response to the global economic crisis, some have advocated that economists consider the economics of the Austrian school. This paper examines elements of Roger Garrison's Time and Money as an exposition of Austrian Business Cycle Theory not incorporating some of the more complex elements of...

In recent academic and to some extent public debates, mainstream economics has been accused of excessive mathematization. The rejection of mathematical and other formal methods is often cited as a crucial trait of Austrian economics. Based on a systematic discussion of potential benefits and...

Carl Menger's Principles of Economics, published in 1871, is usually regarded as the founding document of the Austrian School of economics. Many of the School's prominent representatives, including Friedrich Wieser, Eugen Böhm-Bawerk, Ludwig Mises, Hans Mayer, Friedrich August Hayek, Fritz...

Friedrich Hayek has been one of the dominating intellectual figures of the 20th century. Hayek, together with Gunnar Myrdal, received the 1974 Nobel Memorial Prize in economics, for "their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the...

A series of recent reviews of the depression of 1920-21 by Austrian School and libertarian economists have argued that the downturn demonstrates the poverty of Keynesian policy recommendations. However, these writers misrepresent important characteristics of the 1920-21 downturn, understating...

The US time structure of production during the 2002 through 2009 business cycle is characterized empirically using industry-level input-output data. An industry’s total industry output requirement (TIOR) is proposed as a metric for "roundaboutness". I find that the time structure of production...

A vector error-correction model (VECM) of output, consumption, investment, and credit is identified and estimated, employing the Johansen-Juselius (1990) test for cointegration. Because the Austrian school views economic activity as a disequilibrium process, VECM estimates offer an empirical...

This study argues that increasing malinvestment in an economy raises the actual credit risk but not the calculated credit risk until the onset of a recession. To this end, I analyse the relationship between credit risk and malinvestment in Germany, Spain, and Italy using a credit risk indicator...

It is generally accepted that F.A. Hayek gave up the business cycle as an object of theoretical investigation following the publication of 1941's The Pure Theory of Capital. The present paper aims to cast a shade of doubt upon this received view. Many of Hayek's philosophical writings bear...

The business cycles theories of Wicksell (1898), Schumpeter (1912), Mises (1912), Hayek (1929, 1935) and Minsky (1986, 1992) explain business cycles by distorted prices on capital markets, buoyant credit expansion and overinvestment. The exuberance during the boom endogenously causes the...