F.A. Hayek's trade cycle theory was triumphant in the early 1930s, but withered within a decade as critics went unanswered. Hayek challenged others to “prove” theoretically, what he “knew” intuitively about business cycles. In the late 1990s, Roger Garrison responded with a logically...

Ludwig von Mises considered immediate overconsumption essential to the Austrian Business Cycle Theory (ABCT); Friedrich Hayek never agreed. Examining this disagreement, Roger Garrison concluded that Hayek's exposition of ABCT (a stages-of-production framing without immediate overconsumption)...

This paper investigates the six textbooks most commonly adopted in U.S. undergraduate money and banking courses for how they describe the influences that commercial banks and central banks have on macroeconomic stability. We examine seven topics: (1) the inherent stability of banks, bank runs,...

Foreign aid has failed to bring about any significant development results in the poor countries of Africa in over sixty years of existence. The failure of aid is due to the fact that development planning faces an insurmountable calculation problem. Attempting to salvage aid by making it more...

This paper presents a monetary explanation the US recession of 1797. Credit expansion initiated by Bank of the United States in the early 1790s unleashed a bout of inflation and low real interest rates which spurred a speculative investment bubble in real estate and capital intensive...

This paper resolves a long-running debate in the economics literature – the debate over Smith's theory of money and banking – and thereby revolutionizes current understanding about the history and evolution of monetary analysis. Smith did not present either the real-bills theory or a...

The most sophisticated monetary and banking policy advice available in the decades after 1776was found in Adam Smith’s Wealth of Nations. Smith recommended free competition amongnationwide banks of issue with only minimal legal restrictions and no legal privileges. Yetneither Alexander...