Microfoundations and Macroeconomics

This book constructs a systematic presentation of what Austrian macroeconomics would look like. The book is original and highly accessible and will appeal to professional economists and students.
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 disequilibriam theories. The author weaves these three strands together to construct a systematic presentation of Austrian macroeconomics, demonstrating that traditional Austrian cycle theory is strongly compatible with the Yaegerian monetary disequilibrium perspective. The book consists of three sections: Part I 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 II develops a market process macroeconomics, exp