Who Were the Sea Peoples?

'Hayek openly concedes it is impossible to characterize different investment processes as "longer" or "shorter," and thus as more or less capital-intensive, in any unambiguous way, except, perhaps, in the ex post tautological sense of being adopted at a lower interest rate. But it is nonetheless the case that a lower rate of interest means investment projects that would not otherwise be undertaken, either because the volume of their expected output functions was too small, or else the volume of the relevant input functions too large, will now be feasible. The rate of interest, then, determines "only to what point on the schedule investment will be carried," that is, it determines the last investment project that becomes economically viable.' -- Rethinking the Keynesian Revolution , Goodspeed, pp. 134-135 As I understand the above, it agrees with what I wrote here . Hayek had abandoned a "lengthening structure of production" as an impor...

No, it does not: "But now the drop in interest rates falsifies the businessman's calculation. Although the amount of capital goods available did not increase, the calculation employs figures which would be utilizable only if such an increase had taken place. The result of such calculations is therefore misleading. They make some projects appear profitable and realizable which a correct calculation, based on an interest rate not manipulated by credit expansion, would have shown as unrealizable. Entrepreneurs embark upon the execution of such projects. Business activities are stimulated. A boom begins. "The entrepreneurs embark either upon lateral expansion of production (viz., the expansion of production without lengthening the period of production in the individual industry) or upon longitudinal expansion (viz., the lengthening of the period of production). In either case, the additional plants require the investment of additional factors of production." -- Mise...

Over at Nick Rowe's blog : "I imagine you would see a bunch of different explanations given, if you read Mises, Hayek, Haberler, Rothbard, etc. on the business cycle. And since they would be doing it in words, not a formal model, it would be hard to put our finger on exactly what the claim was." Ouch, Bob, ouch!

Here . Some people have called me a "born-again Keynesian." Others have said I've "sold out to the dark side." Uh-uh. What I really am is someone who found out that the "kindergarten Keynesianism" he was spoon-fed by various "pop-Austrian" authors was as inaccurate as the "kindergarten Hayekianism" he found amongst various scribes on the left. (And I discovered that when I had to teach Keynes, and, as an honest teacher, felt I had to really get his ideas as he saw them before I could properly teach them.) So what I "really" am is a guy who now is working his ass off to grasp this whole debate, including the perspective of the hundreds of economists besides Keynes and Hayek who offered thoughts on the nature of the business cycle.

""The most valuable and original contributions of the monetary over-investment theory are (1) the analysis of the maladjustment in the structure of production brought about by the credit expansion during the prosperity phase of the cycle and (2) the explanation of the breakdown as consequent on that maladjustment. But our analysis has also shown that the theory is not in all respects complete. The claim to exclusive validity is open to doubt. It is a little difficult, for example, to understand why the transition to a more roundabout process of production should be associated with prosperity and the return to a less roundabout process a synonym for depression. Why should not the original inflationary expansion of investment cause as much dislocation in the production of consumers' goods as the subsequent rise in consumers' demand is said to cause in the production of investment goods?" -- Prosperity and Depression