Two posts -
David Glasners declaring that Hayek is neoclassical. I think he's right. I don't think he's only neoclassical, but he clearly did neoclassical economics.
Krugman with lots of thoughts on the value of neoclassicism, agent based modeling as an alternative, and the shortcomings of the Austrian school.
Krugman's post is interesting in that every point he raises was discussed at length in my Macro Political Economy class last night. He is more receptive to neoclassicism than my professor, and I am with Krugman on this. But he took much the same view as my professor on the Old Keynesian approach to things that was much more willing to part ways on methodological individualism. I agree with my professor and the Old Keynesians on this. Methodological individualism is really an odd obsession if you think about it - no other science works likes this. And yes, we can say this without denying the value of good microfoundations.
As far as Hayek being neoclassical, I actually spent my train ride home thinking a lot about this very question, not because I was considering the discussion in class (which didn't mention Hayek), but because I was jotting down more for my Critical Review paper. I think there is a relatively simple marginal condition that can turn a typical "mainstream" model into a model with an Austrian capital structure, and the marginal condition does not at all guarantee an Austrian style business cycle. That depends (as I've said before) on your interest rate theory. I'll probably play around with this more in the future, but it won't make it into the Critical Review paper, which is supposed to stay relatively non-technical.
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