In this link is now available a new working paper co-authored with Alexander W. Salter (GMU) about the treatment the ABCT has recently received by prominent «non-Austrians.» It is interesting to note that after the 2008 crisis, one of the largest in the last century, was unforeseen by «mainstream» models and the discipline has turned to the old Mises-Hayek theory of the business cycle to fill the gap.

What are these economists saying right about the ABCT? What are they saying wrong? What is not being said? And, equally important, what are the recent developments in the ABCT and how can this theory contribute to present puzzles in macroeconomics.

This paper analyses the renewed scholarly interest in the Mises-Hayek, or “Austrian,” theory of the business cycle since the 2008 financial crisis. Understandably, the economics profession has broadened its search for the crises’s explanation beyond the standard DSGE framework. Austrian business cycle theory, with its emphasis on the importance of the monetary system for resource allocation and the linkage of consumer demand with producer supply through the coordination of the economy’s structure of production, offers a fruitful realm for productive intellectual arbitrage in business cycle research. After reviewing the post-crisis literature that engages Austrian business cycle theory, we discuss what is being said that is correct, what is being said that is incorrect, and what is not being said that ought to be said. This last category is most important largely due to the fact that the post-crisis literature engaging Austrian business cycle theory has not addressed advances in the theory made since the days of Mises and Hayek. We also present modern work being done on Austrian business cycle theory and highlight three key areas of contemporary economics where Austrian business cycle theory has the potential to do significant work.