Premium
The Hayekian Puzzle: Spontaneous Order and the Business Cycle
Author(s) -
Witt Ulrich
Publication year - 1997
Publication title -
scottish journal of political economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.4
H-Index - 46
eISSN - 1467-9485
pISSN - 0036-9292
DOI - 10.1111/1467-9485.00044
Subject(s) - spontaneous order , business cycle , economics , order (exchange) , austrian school , aggregate (composite) , capital (architecture) , neoclassical economics , positive economics , keynesian economics , finance , market economy , materials science , archaeology , composite material , history
In his early years, F. A. Hayek focused his research on the theory of capital and the business cycle. Later he turned to social philosophy and the theory of a spontaneous economic order. The two phases, it is argued in this paper, correspond to two basically incompatible research programs—general equilibrium theory vs. a theory of adapting, collective learning, and expectation formation. Hayek never reconsidered business cycle theory in the light of his later thought. The paper asks why and discusses what role cyclical fluctuations in aggregate economic activity may have to be play in the theory of spontaneous economic order.