ABSTRACT OF PAPER
Title: The Making of F. A. Hayek’s “Monetary Theory and the Trade Cycle”
Author: KLAUSINGER Hansjörg
This paper argues that in order to thoroughly understand Monetary Theory and the Trade Cycle (MTTC) and its reception one has to pursue the process of its making back to the context of the German debate from which it originated, that is to the German version (Hayek 1929). Thereby it should be possible to more easily grasp the problems which Hayek addressed and to clarify the terminology he used. For this purpose I will sketch the publishing history of MTTC and then set out a list of issues that figure prominently in MTTC. These are: (1) The equilibrium approach to the business cycle. (2) The nature of the natural rate of interest. (3) Monetary versus non-monetary explanations of the cycle. (4) The notion of forced saving. (5) The inevitability of the crisis and the prediction of 1929. (6) Full employment of resources as the starting point of analysis. The upshot of this examination will be that as a result of its publishing history and its background in the German debate the contemporary reception rated MTTC as a contribution of lesser importance, e.g. as compared with Prices and Production (PP), and as MTTC forms a prerequisite for understanding PP its neglect proved deleterious.
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