Show Summary Details

Page of

PRINTED FROM OXFORD HANDBOOKS ONLINE (www.oxfordhandbooks.com). © Oxford University Press, 2018. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a title in Oxford Handbooks Online for personal use (for details see Privacy Policy and Legal Notice).

date: 15 December 2018

Abstract and Keywords

The recent revival of boom-bust business cycles and the worldwide slow recovery from 2009–2012 has renewed interest in the analysis of a money-production economy developed by Keynes and capital-structure-based Austrian macroeconomics developed by Hayek, Mises, Rothbard, and, most recently, Garrison. Both approaches identify time, money, banking, financial markets, interest, and investment as the major sources of coordination failure leading to recession or depression. When compared with single-aggregate modern macroeconomic models, both Keynes’s and the Austrians’ models, with their lower level of aggregation, provide a better understanding of how an economy goes wrong, However, the chapter argues that Keynes’s model is flawed because it lacks a capital-structure foundation. Keynesian macroeconomic policy is generally unnecessary and, if applied consistently, destabilizes the economy. Austrian economics and its capital-based macroeconomics provide better guidance on cause, recovery, and, more important, prevention.

Keywords: Austrian economics, business cycles, capital structure, Hayek, Keynes, Keynesian, macroeconomic policy, Mises, recession, recovery

Access to the complete content on Oxford Handbooks Online requires a subscription or purchase. Public users are able to search the site and view the abstracts and keywords for each book and chapter without a subscription.

Please subscribe or login to access full text content.

If you have purchased a print title that contains an access token, please see the token for information about how to register your code.

For questions on access or troubleshooting, please check our FAQs, and if you can''t find the answer there, please contact us.