Theories of the Trade Cycle (LFB)

Professor Alec Macfie writes what amounts to a lost classic in business-cycle theory. Theories of the Trade Cycle came out in 1934, partly under the influence of F.A. Hayek who had brought with him to London the insight he gained from his work in Vienna. His insight focused on the role of interest rates in generating the trade cycle — particularly rates manipulated by the central bank. Macfie weighs Hayek’s point against prevailing business-cycle theory, and presents what was surely the cle...