Intertemporal capital substitution and Hayekian booms

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dc.citation.epage300en_US
dc.citation.issue3en_US
dc.citation.spage277en_US
dc.citation.volume31en_US
dc.contributor.authorBilo, Simon
dc.contributor.avlauthorBilo, Simon
dc.contributor.departmentEconomicsen_US
dc.date.accessioned2019-03-07T21:50:02Z
dc.date.available2019-03-07T21:50:02Z
dc.date.issued2017-05-03
dc.description.abstractHayek’s business cycle theory portrays monetary expansion and monetary contraction with counterintuitive asymmetry. On the one hand, it suggests that they both change relative prices and cause costly reallocations of production factors. At the same time, the theory predicts that while a monetary contraction causes the economic crisis, the monetary expansion comes with the boom. I argue that what I call intertemporal capital substitution in industries close to final consumption explains why there is a boom in spite of the costly reallocations. More specifically, monetary expansion only gradually increases the demand for nonspecific factors of production by industries that are temporally remote from final consumption. Responding to the expected higher cost of nonspecific factors, consumer-goods industries temporarily increase output and depreciate specific durable production factors faster than they planned.en_US
dc.description.versionPublished articleen_US
dc.identifier.citationBilo, S. Rev Austrian Econ (2018) 31: 277. https://doi.org/10.1007/s11138-017-0379-yen_US
dc.identifier.doi10.1007/s11138-017-0379-y
dc.identifier.issn0889-3047
dc.identifier.issn1573-7128
dc.identifier.urihttp://hdl.handle.net/10456/48111
dc.language.isoen_USen_US
dc.publisherSpringer Verlagen_US
dc.relation.ispartofThe Review of Austrian Economicsen_US
dc.relation.isversionofhttps://link.springer.com/article/10.1007%2Fs11138-017-0379-yen_US
dc.rightsÂİ Springer Science+Business Media New York 2017en_US
dc.subjectCapacity utilizationen_US
dc.subjectHayeken_US
dc.subjectbusiness cycleen_US
dc.subjectIntertemporal capital substitutionen_US
dc.titleIntertemporal capital substitution and Hayekian boomsen_US
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