On Hayekian Triangles

Procesos de Mercado: Revista Europea de Economia Politica, Vol. 3, No. 2, pp. 39-141, Fall 2006

76 Pages Posted: 8 Jul 2011  

William Barnett II

Loyola University New Orleans

Walter E. Block

Loyola University New Orleans - Joseph A. Butt, S.J. College of Business

Date Written: July 6, 2011

Abstract

The triangle is an integral part of the history of economic thought. It has been used by writers such as Jevons (1871), Taussig (1896), Wicksell (1934, 1969) to illustrate and to help us understand capital theory. Since Hayek (1931) this geometrical figure has been used as a basic pedagogical device to explain the Austrian Business Cycle Theory (ABCT). The purpose of the present paper is to argue that the triangle is highly problematic, if not fatally flawed, and that if ABCT is to be made intelligible this tool of analysis must be either completely jettisoned, or heavily supplemented with a list (see below) of its shortcomings. Moreover in some ways the triangle has been responsible for the relative lack of development of ABCT for over a half century.

Suggested Citation

Barnett, William and Block, Walter E., On Hayekian Triangles (July 6, 2011). Procesos de Mercado: Revista Europea de Economia Politica, Vol. 3, No. 2, pp. 39-141, Fall 2006. Available at SSRN: https://ssrn.com/abstract=1880543

William Barnett II

Loyola University New Orleans ( email )

526 Pine Street
New Orleans, LA 70118
United States

Walter E. Block (Contact Author)

Loyola University New Orleans - Joseph A. Butt, S.J. College of Business ( email )

6363 St. Charles Avenue
Box 15, Miller 321
New Orleans, LA 70118
United States
(504) 864-7944 (Phone)
(504) 864-7970 (Fax)

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