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The Hayekian Puzzle: Spontaneous Order and the Business Cycle


  • Witt, Ulrich


A distinction is often made in F. A. Hayek's oeuvre between his earlier inquiries into the theory of capital and the business cycle and his later work on social philosophy and spontaneous economic order. This paper argues that these phases are based on two different, and basically incompatible, research paradigms--general equilibrium versus the dynamics of learning and expectation formation. Apparently running into troubles with his general equilibrium approach, Hayek abandoned business cycle research and never attempted to integrate it with his later thought. The paper therefore reconsiders the role of cyclical economic fluctuations within a theory of spontaneous economic order. Copyright 1997 by Scottish Economic Society.

Suggested Citation

  • Witt, Ulrich, 1997. "The Hayekian Puzzle: Spontaneous Order and the Business Cycle," Scottish Journal of Political Economy, Scottish Economic Society, vol. 44(1), pages 44-58, February.
  • Handle: RePEc:bla:scotjp:v:44:y:1997:i:1:p:44-58

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    References listed on IDEAS

    1. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
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    Cited by:

    1. Elias Khalil, 1997. "Friedrich Hayek's Theory of Spontaneous Order: Two Problems," Constitutional Political Economy, Springer, vol. 8(4), pages 301-317, December.
    2. Wagner, Richard E., 2012. "A macro economy as an ecology of plans," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 433-444.
    3. Dostaler, Gilles, 2001. "La genèse et l’évolution de la théorie des cycles de Hayek," L'Actualité Economique, Société Canadienne de Science Economique, vol. 77(2), pages 207-230, juin.
    4. Hanappi Hardy, 2014. "Evolutionary Political Economy in Crisis Mode," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(2-3), pages 422-440, April.
    5. van den Hauwe, Ludwig, 2006. "Review of Huerta de Soto´s `Money, Bank Credit, and Economic Cycles´," MPRA Paper 49, University Library of Munich, Germany.
    6. G. R. Steele, 2005. "Psychology, social evolution and liberalism: a Hayekian trinity," Review of Political Economy, Taylor & Francis Journals, vol. 17(4), pages 571-586.
    7. Yong Tao, 2016. "Spontaneous economic order," Journal of Evolutionary Economics, Springer, vol. 26(3), pages 467-500, July.
    8. Martin Komrska & Marek Hudík, 2014. "Were Hayek?s Monetary Policy Recommendations Inconsistent?," Proceedings of Economics and Finance Conferences 0402133, International Institute of Social and Economic Sciences.
    9. Caldwell, Bruce, 2014. "George Soros: Hayekian?," LSE Research Online Documents on Economics 65470, London School of Economics and Political Science, LSE Library.
    10. Martin Komrska & Marek Hudík, 2016. "Hayek’s monetary theory and policy: A note on alleged inconsistency," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 29(1), pages 85-92, March.
    11. Scott Scheall, 2015. "A Hayekian Explanation of Hayek's 'Epistemic Turn'," Economic Thought, World Economics Association, vol. 4(2), pages 1-32, September.

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