Thursday, June 21, 2007


Some time ago, I submitted a paper, "Some Fallacies of Austrian Economics" to the Quarterly Journal of Austrian Economics (Fixed journal title). I received referee comments, as well as a rejection letter.

I find the references to the literature helpful. I would have liked more guidance on recent articles on Austrian Business Cycle theory in the QJAE and the Review of Austrian Economics. (Aren't there any in Critical Review or the Review Of Political Economy?) I would have also liked suggestions on where to cut. Probably like most authors, I find some of the referee's comments misguided, and he sometimes missed what I was saying. Maybe I'll be more clear in my next revision.


Anonymous said...

Well, from what I read the basic argument of the Austrian Business Cycle is that it is caused by banks lowering the rate of interest below its "natural" rate by excessive credit creation. This causes an excess of investment, which causes the slump when interest rates are inevitably raised.

So it is rooted, ironically, in equilibrium analysis and the desire that banks do not act like capitalists.

In terms of the criticism raised to the article, I'm not sure what to recommend. Have you asked Steve Keen? He mentions in "Debunking Economics" that the Austrian "roundaboutness" as dependent on interest rates as the neo-classical school.

It is doubtful that they will be interested in the CCC, as they consider themselves above and beyond the neoclassical school and probably assume that any criticism based on critiquing that is irrelevant to them.

I'll try and read the paper over the weekend and see if I can see anything. Although I'm not an expert.


Robert Vienneau said...

I agree with the criticism that my article is too long. I haven't corresponded with Steve Keen about this.

Here are three examples of mistakes by the referee: Smithies (1935) does not treat a Leontief Input/Output matrix. My example has a countably infinite number of stages, not eight. I never claim that Hayek's triangles were not novel in 1931. I could go on with examples.

I don't know if one can convince Austrians to take an interest in the errors in their business cycle theory. I really don't want to get into how pointless many of Yeager's and Garrison's observations seem to me.