ABCT see Austrian business cycle theory
aggregate demand 209
Allied Social Sciences Association (ASSA) 17
Arrow-Debreu model 106, 109, 115
Arthur, B. 61
ASSA see Allied Social Sciences Association
Austrian business cycle theory (ABCT) 122, 264–6
Austrian economics: causation 27–8; disequilibrium discoordination 34–5; dispersion of knowledge 23–5; economic institutions 269–72; empirical generalization 269; entrepreneurship 267–9; equilibrium discoordination 33–4; expectations 38–9; general equilibrium welfare economics 37–8; Keynesian diversion 19; Knightian uncertainty 30–1; law and economics 273–5; market processes 269–72; misplaced concreteness 35–8; monetary theory and 263–6; money 40–2; partial equilibrium welfare economics 36–7; price 40–2; process 39–40; profits 38; radical uncertainty 31–2; research policy 19; risk 29–30; spontaneous order 272–3; static welfare economics 35–8; subjectivism 21–3; time 25–7; today’s 294–5; uncertainty 28–9
Austrian heterogeneous capital theory 269
Austrian theory: of capital and interest 192; of entrepreneurship 94; of firm 156–9
behavioral economics: challenge 10–14; Linda problem 11–13; and neoclassical economics 10; opportunity 10–14; rational behavior 10–11
Benson, B. 272
Boettke, P. 294
Böhm-Bawerk, E. von 19, 25–6, 201–2
Butos, W. 273
Cantillon effects 233
Cantillon, R. 220
Capital and its Structure (Lachmann) 264
Capital in Disequilibrium: The Role of Capital in a Changing World (Lewin) 264
capital-using economy: capital goods 185–6; development of 187–8; natural capital 189; output variations 193–7; production structure 189–92; rate of interest 192–3; revisited subjectivism 201–4; roundaboutness 189; time preferences 197–201
Cauchy distribution 6
causal efficacy 112
causation, Austrian economics 27–8
Clark-Knight theory of capital 108
Coddington, A. 149
communicated knowledge 97
competition: antitrust policy 172–7; dynamic 162–3; dynamic equilibrium 149–54; in economic theory 136–7; knowledge and 140–6; and monopoly 177–84; normative analysis 146–9; orthodox theory 137; parable on 135–6; perfect 136–8; pollution policy 168–71; process theories 146–9; rules versus continuous utility maximization 154–60; static 162–3; stochastic equilibrium 159–60; subjectivist/Austrian theory of firm 156–9
Competition and Entrepreneurship (Kirzner) 267
“Competition as a Discovery Procedure,” (Hayek) 140
competitive firms 177
constructivism 73
consumer decision-making, costs in 101–2
content as subjectivism: context of knowledge 92–3; division of knowledge 94–7; nature and process of learning 93–4; scientific knowledge 97–9
continuous utility maximization 154–60, 164
conventional learning models 139
coordinationist macroeconomics 264
coordinative equilibrium 126
costs: consumer decision-making 101–2; social 103; subjectivism of 22–3; theory of firm 102–4; user 73
Davidson, P. 74
decision-making, structural components 82
degree of roundaboutness 202
derived demand effect 221, 264
discount effect 264
discovery of opportunities: equilibrium 138–9; process 139–40
disequilibrium discoordination 34–5
economic fluctuations: Hayek’s theory of 225–6; Hayek’s monetary theory of 209; subjectivist theory of 220–7
economic imperialism 156
Economics as a Coordination Problem (O’Driscoll) 284
Eisenhower, D. 9
empirical generalization 269
entrepreneurial alertness 60
entrepreneurial cognition 267
entrepreneurial learning process 94
entrepreneurship: Austrian economics 267–9; Austrian theory of 94; individual 116–17; political 270–1; Schumpeter’s concept 117
equilibrium: coordinative 126; discovery of opportunities 138–9; as exact coordination 126–7; Hayekian 126–7; inadequacy of exact coordination 127–30; inconsistency with 121–2; knowledge requirement 132–3; and optimality 132–4; pattern 62; pattern coordination 130–2; static models 133–4; stochastic 159–60; unemployment 208
equilibrium discoordination 33–4
expectational dynamics 39
Fand, David 8
favorable relevance 86
Federal Open Market Committee (FOMC) 235–6
FOMC see Federal Open Market Committee
Frydman, R. 122
Gaussian distribution 6
general equilibrium welfare economics 37–8
genetic-causal tradition 60
genuine uncertainty: and economic process 116; endogeneity 120–1; features 120; inconsistency with equilibrium 121–2; typification 123–4; uniqueness 124–5
global optimality 148
Hahn, F. 33
Harrod, Sir, R. 73
Hayek’s theory of economic fluctuations 225–6
Hayek, F. A. 19; competition 137; constructivism 73; Copenhagen Lecture 284; dispersion of knowledge 24–5; equilibrium concept 33; knowledge characteristics 140–6; spontaneous order 272–3
Hayek’s monetary theory of economic fluctuations 209
Heiner, R. 164
heterogeneity, real time 112
Hicks, Sir, J. 27
Holcombe, R. 268
Holmes-Moriarty story 28–9, 76, 129
homogeneity, Newtonian time 106
Husserl, E. 53
indeterminacy of process 115–16
individual entrepreneurship 116–17
inflationary shocks 42
inflation, unsustainability of 41–2
institutions: division of knowledge 95; objective knowledge 96–7
internal time consciousness 53
interpersonal equilibria 58
intertemporal general equilibrium 109
investment demand function 221–2
Kaldor-Hicks potential compensation principle 35
Keynesian diversion 19
Keynesian Revolution 40
Kirzner, I. M. 19, 55–7, 267–9
Knight, F. 7
knowledge: communicated 97; context of 92–3; division of 94–7; empirical 141–2; nature and process of learning 93–4; nonprice signals 143–4; private 141; requirement for equilibrium 132–3; scientific 97–9; surprise 144–6; tacit 142–3
labor-leisure-based models 195
Langlois, R. 163
Leeson, P. 272
Lewin, P. 264
McQuade, T. 273
macroeconomics: coordinationist 264; and monetary theory 263–6
Manne, H. 286
markets: oligopolistic 243; and uncertainty 163–8
mathematical continuity 107
methodological individualism 20
Mill, J. S. 217
modern equilibrium theory 147
monetary shocks 209
money: business cycle theory 263–6; evolutionary approach 243; microanalysis 208–10; origin of 210–15
monopoly: Charles River Bridge case 181; and competition 177–84; definition 177; neoclassical theory 179–80; profit-maximization 180; property rights theory of 177–84
Mont Pelerin Society 8
Morgenstern, O. 129
multi-valued expectations 88–90
Myrdal, G. 107
natural capital 189
neoclassical economics: and behavioral economics 10; eradication of time 108; genuine uncertainty 116; ignorance 70; planning process 113; real time 69; sponginess 240; uncertainty 70
neoclassical monopoly theory 179–80
neutral money 41
New Palgrave article 294
Newtonian and real time: individual entrepreneurship 116–17; maximizing behavior 117–18; rules of thumb 118
Newtonian time: capital theory 108; causal inertness 107–8; definition 106; eradication of time 108–9; homogeneity 106; illusion of change 108; intertemporal general equilibrium 109; mathematical continuity 107; measurement of time 109–10; tight prior equilibrium 109
nonprice planning 157
nontransformable uncertainty 30
normative analysis, competition 146–9
oligopolistic markets 243
optimality and equilibrium 132–4
optimal policy: antitrust 172–7; pollution 168–71
orthodox theory of competition 137
partial equilibrium welfare economics 36–7
pattern coordination: equilibrium 130–2; stochastic 130
pattern equilibrium 62
pattern explanation 86
pattern prediction 86
perfect competition theory 136–8
Phelps, E. 7
“playing fairly” 136
political entrepreneurship 270–1
Post-Keynesianism 74
praxeology 20
prices: division of knowledge 95; objective knowledge 96–7
private knowledge 141
process economics 71
process theories, competition 146–9
profit-maximization 180
profits 38
property rights theory of monopoly 177–84
Pure Theory of Capital (Hayek) 26
rational expectations hypothesis (REH) 227–37
real duration 53
real time 69–70; causal efficacy 112; consequences of 113; dynamic continuity 111–12; heterogeneity 112; planning, action and 113–14
regression theorem 271
REH see rational expectations hypothesis
Risk and Business Cycles: New and Old Austrian Perspectives (Cowen) 265
Robbinsian maximizing 115, 117
Robertson, D. H. 225
Rothbard, M. N. 19
roundaboutness 189
rule-following behavior 154
rule of law 154
Salerno, J. 268
Say’s Law 217
Schumpeter, J. A. 140
Schumpeter’s concept of entrepreneurship 117
scientific knowledge 97–9, 273
secondary deflation 265
single-valued expectations 87–8
social cost 103
social efficiency 148
static and dynamic subjectivism: arguments 86–7; decision weights 88–90; factors 87; institutions 90; multi-valued expectations 88–90; single-valued expectations 87–8
static welfare economics: general equilibrium welfare economics 37–8; partial equilibrium welfare economics 36–7
Stein, S. 292
stochastic equilibrium: competition 159–60; Hayekian concept of equilibrium 33–4
stochastic pattern coordination 130
Storr, V. 292
subjective probability 70
subjectivism: Austrian contributions 74–5; Austrian tradition 21–3; as content 92–9; of costs 22–3; dimensions of 82–6; dynamic 53, 84–6; ignorance 70; Keynesianism 73–4; method of 81–2; as phenomenon 78–9; Post-Keynesianism 74; real time 69–70; research policy 79–81; static 82–4; in time 53; time and ignorance 70–3; as weighing of alternatives 99–104
subjectivist capital theory: capital goods 185–6; development of 187–8; natural capital 189; output variations 193–7; production structure 189–92; rate of interest 192–3; revisited subjectivism 201–4; roundaboutness 189; time preferences 197–201
subjectivist theory of economic fluctuations: evidence 225–7; prices and production 220–5
subjectivist theory of firm 156–9
supplement to neoclassical economics see Austrian economics
Theory of Economic Development (Schumpeter) 140
theory of firm: costs in 102–4; subjectivist 156–9
tight prior equilibrium 109
time: Austrian economics 25–7; subjectivist capital theory 197–201
time and ignorance economics: disequilibrating forces 54–7; endogenously produced change 60–2; equilibrating behavior prerequisites 57–60; hypothesis 292–4; intellectual climate, olden days 288–9; reconciliation of equilibrium and unpredictable change 62–4; in subjectivism 70–3
Time and Money: The Macroeconomics of Capital Structure (Garrison) 264
time consciousness 53
uncertainty: description with examples 28–9; economic processes and 114–16; genuine 116; Knightian 30–1; and markets 163–8; neoclassical method 70; radical 31–2; risk 29–30
unemployment equilibrium 208
uni-valued expectations 88
unsustainability of inflation 41–2
user cost 73
Viniar, D. 6
The Wealth of Nations (Smith) 148
weighing of alternatives: cost, consumer decision-making 101–2; theory of firm, costs 102–4; utility background 100–1; value theory 99–100
Weintraub, E. R. 122
Wieser, F. von 19