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Re-switching, the average period of production and the Austrian business-cycle theory: A comment on Fratini

Author

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  • Peter Lewin

    (University of Texas at Dallas)

  • Nicolas Cachanosky

    (Metropolitan State University, Denver)

Abstract

In a recent contribution to this journal Saverio Fratini (Review of Austrian Economics, 2019) offers a critique of our work on Austrian Capital Theory on the grounds that our conception of capital and “roundaboutness” does not appear to provide adequate support for the Austrian business-cycle theory. In this comment we explain why we think this criticism is wrong.

Suggested Citation

  • Peter Lewin & Nicolas Cachanosky, 2019. "Re-switching, the average period of production and the Austrian business-cycle theory: A comment on Fratini," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 32(4), pages 375-382, December.
    • Handle: RePEc:kap:revaec:v:32:y:2019:i:4:d:10.1007_s11138-019-00460-1
    DOI: 10.1007/s11138-019-00460-1
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    References listed on IDEAS

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    1. Enrico Sergio Levrero & Antonella Palumbo & Antonella Stirati (ed.), 2013. "Sraffa and the Reconstruction of Economic Theory: Volume One," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-137-31683-7, December.
    2. Peter Lewin, 1994. "Capital theory," Chapters, in: Peter J. Boettke (ed.), The Elgar Companion to Austrian Economics, chapter 31, Edward Elgar Publishing.
    3. Saverio M. Fratini, 2014. "The Hicks-Malinvaud average period of production and 'marginal productivity': A critical assessment," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 21(1), pages 142-157, February.
    4. Frederick R. Macaulay, 1938. "Some Theoretical Problems Suggested by the Movements of Interest Rates, Bond Yields and Stock Prices in the United States since 1856," NBER Books, National Bureau of Economic Research, Inc, number maca38-1, March.
    5. Saverio M. Fratini, 2013. "Malinvaud on Wicksell’s Legacy to Capital Theory: Some Critical Remarks," Palgrave Macmillan Books, in: Enrico Sergio Levrero & Antonella Palumbo & Antonella Stirati (ed.), Sraffa and the Reconstruction of Economic Theory: Volume One, chapter 5, pages 105-128, Palgrave Macmillan.
    6. Saverio M. Fratini, 2019. "A note on re-switching, the average period of production and the Austrian business-cycle theory," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 32(4), pages 363-374, December.
    7. Nicolás Cachanosky & Peter Lewin, 2018. "The Role of Capital Structure in Austrian Business Cycle Theory," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 33(Summer 20), pages 21-32.
    8. Lewin,Peter & Cachanosky,Nicolas, 2019. "Austrian Capital Theory," Cambridge Books, Cambridge University Press, number 9781108735889.
    9. Yeager, Leland B, 1976. "Toward Understanding Some Paradoxes in Capital Theory," Economic Inquiry, Western Economic Association International, vol. 14(3), pages 313-346, September.
    10. Michael Osborne, 2014. "Multiple Interest Rate Analysis: Theory and Applications," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-137-37277-2, December.
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    Cited by:

    1. Saverio M. Fratini, 2019. "Re-switching and the Austrian business-cycle theory: A rejoinder," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 32(4), pages 383-389, December.
    2. William J. Luther, 2021. "Two paths forward for Austrian macroeconomics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 34(2), pages 289-297, June.

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    More about this item

    Keywords

    Average period of production; Degree of roundaboutness; Capital; Re-switching; Austrian business-cycle theory;
    All these keywords.

    JEL classification:

    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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