“In view of the apparently widespread impression that the influence of liquidity considerations on the rate of interest is a new discovery, the present author may perhaps be excused for pointing out that more than ten years ago he described cyclical fluctuations as largely due to the fact that the rate of interest is in . . . → Read More: Hayek on the Role of Money Liquidity … Another Idea Keynes Did _Not_ Originate
“It is one of the oldest facts known to economic theory that changes in the quantity of money, or changes in the ‘velocity of circulation’ (or the ‘demand for money’), will deflect the rate of interest from its equilibrium position and may keep it for considerable periods above or below the figure determined by the . . . → Read More: Hayek on Money Disturbing Equilibrium
Part IV of Hayek’s The Pure Theory of Capital is the chimeric “unwritten” 2nd “volume” of Hayek’s Pure Theory, the monetary part that goes beyond the “barter economy” and considers the phenomena of interest and production coordination and dis-coordination when money and credit and other “non-barter” market phenomena are brought into the picture.
In several . . . → Read More: Part IV of Hayek’s _The Pure Theory of Capital_
And five book recommendations.