Comments on: Classical theory of the cycle

By: Sinclair Davidson

Sinclair Davidson — Fri, 18 Jan 2013 10:55:20 +0000

Make sure you get the first edition and not one of the later editions. You can download a later edition from the Mises Institute at zero-price.

I managed to get a reprint of the first edition published by University Press of the Pacific (in 2001) a couple of years ago, but I can’t remember where I got it from. It was an online source.

By: sdfc

sdfc — Fri, 18 Jan 2013 10:43:29 +0000

Okay I will. It doesn’t take much to get me to buy a book. You are interrupting my plan of re-reading my suite of Greek history starting with Herodotus.

I’m reading Why Australia Prospered but after that I reckon I need to take a break from economics for a while.

I read Rothbard’s America’s Great Depression recently. Not a patch on the Mystery of Banking.

By: Skuter

Skuter — Fri, 18 Jan 2013 10:38:50 +0000

If I were you, I’d bump P&D up the reading list. If you, can, get hold of both 1st and 3rd editions and compare them. The changes (keep in mind the time period) sparked a vast literature in the history of economic thought…

By: sdfc

sdfc — Fri, 18 Jan 2013 10:07:25 +0000

I thought that might be the case.

By: Skuter

Skuter — Fri, 18 Jan 2013 10:05:34 +0000

Sorry, that should read sdfc, not serf. Damn auto correct!

By: sdfc

sdfc — Fri, 18 Jan 2013 10:04:05 +0000

I’ve got about 9 million books on the reading list at the moment and you’ve added another one. Thanks for that.

By: Skuter

Skuter — Fri, 18 Jan 2013 09:59:59 +0000

Serf, I think you’d be surprised. Don’t guess. Have a read. You won’t be wasting your time…

By: sdfc

sdfc — Fri, 18 Jan 2013 07:47:11 +0000

Skuter
Ignoring debt backed money is a major failing of almost all branches of macro. Classical economics is no different. I’m guessing Haberler did too.

By: Helen Armstrong

Helen Armstrong — Fri, 18 Jan 2013 00:02:21 +0000

Following on from p 146, would I be right in thinking that Keynes gave governments the excuse in a foil of economic legitimacy to do what is inherent in many natures anyway – spend and spend more and then borrow to spend more. To hell with tomorrow.

By: Skuter

Skuter — Thu, 17 Jan 2013 23:32:48 +0000

Haberler’s Prosperity and Depression (1st ed) is really the best reference in my view. It certainly opened my eyes. I like the taxonomy Haberler develops in order to characterise both the phases of business cycles (upswing, downward turning point, downswing and upward turning point), and the various theories (purely monetary, monetary overinvestment, non-monetary overinvestment, underconsumption, psychological theories, agricultural/’harvest’ theories) used to explain the business cycle.
He discusses the commonalities and differences between theories and where their strengths and weaknesses are in explaining the various phases. What struck me was the sense that no one particular theory explained each and every business cycle. Some might see that as a weakness in classical business cycle theory, but I see it as a virtue. What they mostly had in common was that there were structural issues at play and so it would be reasonable to think that structural disturbances could arise from different causes.
Contrast that with what we have today. Downturns in nominal and real GDP, rises in unemployment, etc. are all seen as being symptomatic of the one problem that for each group of theorists is fixed by following their own, one-size fits all prescriptions. Monetarists of all stripes say we need more money, while Keynesians say we need to G to replace flagging I. There is never any discussion about the effects of increasing M on capital structure, etc. and no-one ever talks about the composition of G versus the composition of lost I. It is all about aggregates. That to me, sums up what we lost when classical theories were essentially discarded…