1. The empirical relevance of the Mises-Hayek theory of the trade cycle, by Robert B. Lester, Jonathan S. Wolff
I need to reread this one. They don't find evidence of the price and quantity effects in different stages of production predicted by ABCT (they're actually one of the few empirical studies of ABCT that don't find it), and yet they say in the abstract that evidence is therefore "mixed". I'm wondering if I missed something or if reviewers had problems with it and made them add caveats. Anyway, this is of interest to me because it is one of twenty empirical papers looking at ABCT that I discuss in my forthcoming Critical Review paper. I just turned the proofs back in a couple days ago, so at this point it's just a matter of waiting for the issue to come out.
2. The (quantity) theory of money and credit by
Anthony J. Evans,
This is of interest because one of the authors is a regular commenter here. I don't think his identity is a particularly tightly kept secret, but in case it is I'll let him worry about taking credit for it. I classify the point here under the same heading as things like Sraffa's critique of the natural rate, in that the authors are definitely right that the simple stories you hear are actually wrong. Any quantity theory needs to be expressed in terms of the volume of transactions, NOT nominal GDP as you often see it. In most applications, as with the natural rate of interest, I think the nuanced version of the theory is unnecessary to derive important insights. It's one of those things that nobody should feel guilty about teaching in an intro course, for example (it's nice to motivate the LRAS with a naïve quantity theory). But if you do get into the details you really need to treat it more carefully.
Friday Night Music: When I’m 64
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