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Hayek's monetary theory and policy: A note on alleged inconsistency.

Authors :
Komrska, Martin
Hudík, Marek
Source :
Review of Austrian Economics; Mar2016, Vol. 29 Issue 1, p85-92, 8p
Publication Year :
2016

Abstract

Challenging the dominant view, we claim that Hayek's monetary views did not significantly change over his lifetime. The prevalent perception of early Hayek as a money stream stabilizer and late Hayek as a price level stabilizer is attributable to an unjustified normative interpretation of Hayek's positive analysis. We argue that in his contributions to monetary theory, Hayek took the goals of monetary policy as exogenously given and analysed the efficiency of different means of achieving them. Hayek's allegedly inconsistent transformation from a critic to an advocate of price level stabilization is explained by a change of issues under his focus, rather than by a change in his positive views. We also claim that Hayek was always aware that every practical monetary policy involves difficult trade-offs and that he was therefore reluctant to impose his own value judgments on what people should strive for. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
08893047
Volume :
29
Issue :
1
Database :
Complementary Index
Journal :
Review of Austrian Economics
Publication Type :
Academic Journal
Accession number :
113252205
Full Text :
https://doi.org/10.1007/s11138-015-0300-5