TY  - CHAP
AB  - Abstract Since Hayek’s pioneering work in the 1930s, the Austrian business cycle theory (ABCT) 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) the post-boom adjustment process can be understood in an equilibrium framework. Hence, we offer a new interpretation of the existing theory. In doing so, we also address concerns raised with Garrison’s (2001) diagrammatic approach, wherein the economy moves beyond the production possibilities frontier. Our interpretation might accurately be described as a monetary disequilibrium approach grounded in an implicit general equilibrium framework with positive costs of reallocation.
VL  - 20
SN  - 978-1-78635-274-3, 978-1-78635-273-6/1529-2134
DO  - 10.1108/S1529-213420160000020003
UR  - https://doi.org/10.1108/S1529-213420160000020003
AU  - Salter Alexander W.
AU  - Luther William J.
PY  - 2016
Y1  - 2016/01/01
TI  - The Optimal Austrian Business Cycle Theory
T2  - Studies in Austrian Macroeconomics
T3  - Advances in Austrian Economics
PB  - Emerald Group Publishing Limited
SP  - 45
EP  - 60
Y2  - 2024/04/25
ER  -