24 research outputs found
Effect of Potassium and of Desoxycorticosterone Acetate in Acute Heart Injury in the Rat
Tissue Clearance as a Measure of Nutritive Blood Flow and the Effect of Lumbar Sympathetic Block upon Such Measures in Calf Muscle
The time-related subcellular distribution of chromium in the rat liver cell after intravenous administration of Na2 51CrO4
Discovery and social learning in non-priced environments: An Austrian view of social network theory
Austrian economics, Social network theory, Social learning, Extended order, B53, D83, Z13,
Effect of trivalent and hexavalent chromium on renal and hepatic tissue glycogen metabolism of a fresh water teleost Anabas scandens
Accounting for the business cycle: Nominal rigidities, factor heterogeneity, and Austrian capital theory
An Austrian interpretation of the New Keynesian small menu cost model of the business cycle is proposed. Austrian and New Keynesian business cycle theories share the feature that the cycle is generated by rigidities which prevent the economy from adapting instantaneously to changing conditions. Austrian business cycle theory is capital-based, focusing on credit expansion which artificially lowers interest rates and causes an investment boom and unsustainable business expansion. In contrast, the New Keynesian small menu cost model of the business cycle is based on nominal rigidities which prevent markets from clearing. Small menu costs introduce dichotomous behavior, where firms find it locally optimal to avoid instantaneous output price adjustments in the face of the cost, but this local optimum results in economy-wide output and employment fluctuations which are much greater in relative magnitude. The small menu cost model of the business cycle is extended and reinterpreted in light of Austrian business cycle theory with heterogeneous, multiply-specific capital, thus providing a rigorous formalization of the Austrian business cycle. The Austrian interpretation of this New Keynesian model fortuitously addresses several of its shortcomings. Copyright Springer Science + Business Media, LLC 2006Austrian business cycle theory, New Keynesian small menu cost model, Hayekian triangle,