2013-10-19
My review of Hayek’s work, which with today’s post now thoroughly, though not completely, spans from late 1920s to 1930s, has revealed to me a consistent weakness throughout his writing. Aside from short inklings into his future work on spontaneous social orders, his work from this period is backward looking and his attempts to bridge theory and policy produce awkward, and probably unworkable,...
2013-10-11
Fingering through Denationalisation of Money tonight, I found a quote that clearly reflects, I think, Hayek's view regarding MV stabilization. As you might expect, if you have read my last few posts, it is complicated!: I have long since come to the conclusion that no real money can ever be neutral in this sense, and that we must be content with a system that rapidly corrects inevitable errors....
2013-10-11
I hope not to have misrepresented Hayek in my review of his opinion of velocity in the last several posts. I have made clear that Hayek did not accept the idea of MV stabilization as a legitimate policy prescription at the time of his writing Prices and Production . This certainly does not mean he had nothing deep to say in this theoretical matter. In lecture 4 of Prices and Production , he...
2013-10-10
See it here . And if you haven't already, check out the paper here . I was pleasantly surprised to receive an email a couple of weeks ago from someone I don’t know, a graduate student in economics at George Mason University, James Caton. He sent me a link to a paper (“Good as Gold?: A Quantitative Analysis of Hawtrey and Cassel’s Theory of Gold Demand and the Gold Price Level During the Interwar...
2013-10-09
Hayek’s economic perspectives certainly varied over the course of the Great Depression. The beginning of this change saw him distinguish between theory of his opponents and their policy recommendations. In Monetary Theory and the Trade Cycle , Hayek claims that relative prices only move due to a change in the quantity of money: Apart from individual saving activity (which includes, of course the...
2013-10-06
In looking over Monetary Theory and the Trade Cycle I also noticed a rather strange argument that Hayek makes in regard to changes in demand for money. He argues against a policy of stabilization outright. Even if we grant him this claim about policy, I find his desire to disregard the significance of changes in the value of money incongruous with his general concern about “all the changes...
2013-10-05
I have begun a study of Hayek where I am concentrating not as much on Hayek’s claims about his own work as his claims about his opponents. I am hoping that it will help clarify his position concerning the international monetary system during the 1920s and 1930s. In the process of promoting his and Mises's theory of the business cycle, Hayek’s star rose as he eventually earned a position at the...