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Incorporating Social Capital into the Austrian Business Cycle Theory

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  • D’Amico Daniel J.

    (Department of Economics, Brown University, The Political Theory Project Brown University, 2005 8 Fones Alley, Providence, Rhode Island 02912USA)

Abstract

This paper incorporates insights from social capital theory into the traditional Austrian business cycle theory (ABCT). Whereas in the standard Austrian narrative, recovery processes entail the reallocation of investment resources from more towards less-capital intensive industries, social capital may represent an alternative avenue for investment energies. Unique characteristics of social capital are surveyed and strategic opportunities for leveraging social capital by different decision maker types are explained. Recognizing social capital developments amidst business cycles helps to account for the long-term resilience and continual social progress of economic performance amidst increasingly interventionist central banking practices.

Suggested Citation

  • D’Amico Daniel J., 2017. "Incorporating Social Capital into the Austrian Business Cycle Theory," Journal of Business Valuation and Economic Loss Analysis, De Gruyter, vol. 12(s1), pages 1-12, July.
    • Handle: RePEc:bpj:jbvela:v:12:y:2017:i:s1:p:12:n:3
    DOI: 10.1515/jbvela-2016-0015
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    References listed on IDEAS

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    3. Wagner, Richard E, 1999. "Austrian Cycle Theory: Saving the Wheat While Discarding the Chaff," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 12(1), pages 65-80.
    4. Hayek, F. A., 2011. "The Constitution of Liberty," University of Chicago Press Economics Books, University of Chicago Press, number 9780226315379 edited by Hamowy, Ronald, December.
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