I think a lot of it is path dependence in the science and it need not stay that way. Indulge me in a stylized history of thought as to what that path dependence consisted of... I promise I'll get back to ABCT by the end.
Keynes did a better job of explaining the depression so he came out of the 30s and 40s on top. There were informal microfoundations in Keynes and the same worries about microfoundations that Lucas would later express. This is true of Hayek too - there are informal microfoundations but nothing particularly formal in the presentation of ABCT (I've only read portions of Pure Theory of Capital... maybe there's a lot more in there but since Austrians even seem to get headaches from that book perhaps it hasn't been the best ambassador for ABCT).
When Lucas (and Phelps) pushed the microfoundations point Keynes was dominant so of course what got reformed was a microfounded Keynesianism which is essentially the consensus macro model today.
ABCT was not dominant when the Lucas critique came around so ABCT never got the formal microfoundations that modern economists expect of a theory. In that sense I'd kind of take the opposite view of yours in the post - even though there's informal discussion of microfoundations, it's the lack of microfoundations in ABCT that is it's major liability right now.
This need not be the case. ABCT explores a lot of interesting issues around the capital structure that no one else is really talking about. I'll have to take a look at the Calvo article and how it treats the problem.
Recently I wrote a post on what I think is the best way forward for modeling ABCT in a way that mainstream economists would find plausible.
In a nutshell, I think the Romer endogenous growth model is structurally the most similar to Hayek's. Currently in the Romer model there is no time component to intermediate goods. Adding a time component to tie in the interest rate to decisions in the intermediate good markets and then doing an analysis of the impact of interest rate changes should reproduce the essential elements in ABCT in a very highly regarded mainstream macro model.
I'd try it myself but it's tangential to my current dissertation plans.... maybe IHS can incentivize me with some money :)
One other probably much more obvious contributor is that Hayek dropped a lot of his macro work after the 40s. That SURELY made a dent in the success of ABCT. Imagine if Hansen and Samuelson and Tobin and Patinkin and Robinson all just said "oh well - I'll talk about macro from time to time but I'm going to do my really innovative work on other problems"... Keynesianism wouldn't be in very good shape.
Treating Keynesians like they don't understand basic economics probably hasn't helped ABCT's prospects either."
Wednesday, August 14, 2013
Posted by dkuehn at 11:14 AM
Here. The answer to that is pretty complex. If I were to provide a full answer I'd probably reject a lot of his premises in the post too. I don't have time for a full answer write now but I did write up part of my answer on facebook, which I'm reproducing in full below: