Microfoundations and Macroeconomics

In the past, Austrian economics has been seen as almost exclusively focused on microeconomics, and defined by its subjective methodology and understanding of the market as a competitive discovery process, favouring a focus on phenomena such as price coordination and entrepreneurship over macroeconomic concepts. There are, however, three distinct macroeconomic issues that have been pursued by Austrian economists in the post-revival years; the extensions of the Mises-Hayek theory of the trade cycle, the idea of 'free banking' or a completely market-driven monetary system and the pre-Keynesian monetary disequilibrium theories. Steven Horwitz weaves these three strands to construct a systematic presentation of what Austrian macroeconomics would look like, demonstrating that traditional Austrian cycle theory is strongly compatible with the Yaegerian monetary disequilibrium perspective. Microfoundations and Macroeconomics consists of three sections: * Part II includes an explication of an Austrian view of the market process, with a strong emphasis on the role of capital, arguing that 'macroeconomy' is operating correctly when it does not upset this microeconomic ordering process * Part III develops a market process macroeconomics, exploring monetary equilibrium as presented by Selgin, and comparing and contrasting three versions of monetary disequilibrium theory * Part IV explores how this view of macroeconomics affects the way we understand fiscal policy, monetary regimes and banking reform, and labour flexibility. This original and highly accessible work provides the reader with an introduction to Austrian economics and a systematic understanding of Macroeconomics. It will be of great value and interest to Professional economists and students.