Expectations in Austrian Business Cycle Theory: Market Share Matters

27 Pages Posted: 21 Mar 2012 Last revised: 15 Feb 2020

See all articles by Nicolas Cachanosky

Nicolas Cachanosky

Metropolitan State University of Denver; American Institute for Economic Research; UCEMA Friedman-Hayek Center for the Study of a Free Society

Date Written: March 26, 2014

Abstract

One of the most important objections to the Mises-Hayek business cycle theory is the rational expectations critique. The debate between supporters and critics of the Mises-Hayek theory has not paid sufficient attention to the problem of differences in expectations and the market share in the allocation of production factors. I represent financially the effects that occur under the Austrian business cycle theory in the market of production factors as well as how economic imbalances occur when a central bank follows an expansionary policy and entrepreneurs have different expectations.

Keywords: Austrian business cycle theory, rational expectations, adverse selection, monetary policy

JEL Classification: E32, E51, E58

Suggested Citation

Cachanosky, Nicolas, Expectations in Austrian Business Cycle Theory: Market Share Matters (March 26, 2014). 2015. Review of Austrian Economics. Vol. 28, No. 2, pp. 151-165, Available at SSRN: https://ssrn.com/abstract=2025666 or http://dx.doi.org/10.2139/ssrn.2025666

Nicolas Cachanosky (Contact Author)

Metropolitan State University of Denver ( email )

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United States

HOME PAGE: http://www.ncachanosky.edu

American Institute for Economic Research

PO Box 1000
Great Barrington, MA 01230
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UCEMA Friedman-Hayek Center for the Study of a Free Society ( email )

Buenos Aires
Argentina

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