ESTABLISHING THE AUSTRIAN BUSINESS CYCLE

HAYEK, FRIEDRICH A.

Geldtheorie und Konjunkturtheorie.

Wien & Leipzig, Hölder-Pichler-Tempsky, 1929. 8vo. In the original printed wrappers. Very light wear to extremities. First and last leaf with light brownspotting. A very fine and clean copy. XII, (1)-147, (1), [Blank] pp.

First edition of Hayek's first book, famously stating that there is a business cycle and that it is caused by the organization of the monetary system - it was later to be known as the Austrian Business Cycle. The present work established Hayek's ideological position within the economic community and laid the foundation for his future career.
Here, he wrote of the necessity of the trade cycle and that all economic phenomena present that regular wave-like appearance that we observe in cyclical fluctuations. "For Hayek, the cycle was a virtually unavoidable consequence of a credit economy"; "Hayek's fundamental point is that the business cycle is an unfortunate but unavoidable concomitant of a credit economy". (Bruce Caldwell, Hayek's Collected Works).

Hayek's principal investigations in economics concerned capital, money and the business cycle. Ludwig von Mises had earlier applied the concept of marginal utility to the value of money in his Theory of Money and Credit (1912) in which he also proposed an explanation for "industrial fluctuations" based on the ideas of the old British Currency School and of Swedish economist Knut Wicksell. Hayek used this body of work as a starting point for his own interpretation of the business cycle, elaborating what later became known as the Austrian theory of the business cycle.

This work was translated into English in 1933 as Monetary Theory and the Trade Cycle. In 1974 Hayek shared the Nobel Memorial Prize in Economics with Gunnar Myrdal.

Masui p.1277
Cohen 184

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