Geldtheorie und Konjunkturtheorie

[Title Page and Publication Metadata]: Title page and publication details for the 1976 second edition of Hayek's 'Geldtheorie und Konjunkturtheorie', including ISBN and copyright information. [Preface to the Second Edition (1976)]: Hayek reflects on the origins of the work, tracing its development from his 1923-24 studies in New York to his habilitation in Vienna. He quotes extensively from his earlier footnotes regarding the elasticity of the credit system and how low interest rates disproportionately affect production stages furthest from consumption, leading to capital malinvestment. [Preface to the First Edition (1929)]: The original 1929 preface explains that the book expanded from a report for the Verein für Sozialpolitik. Hayek notes that while the book critiques non-monetary theories, it does not yet offer a fully developed business cycle theory, which requires further foundational work on interest and money. A postscript acknowledges D.H. Robertson's similar findings on credit policy. [Table of Contents]: A detailed table of contents outlining the five chapters, prefaces, and indices. [Chapter 1: Theory, Research, and Policy]: Hayek discusses the relationship between economic theory and empirical research, arguing that statistics can verify but never create theory. He asserts that business cycle theory must be an extension of equilibrium theory. He identifies the primary conflict in the field as being between monetary and non-monetary explanations, arguing that only monetary factors can explain deviations from equilibrium that aren't caused by external data changes. [Chapter 2: The Gap in Non-Monetary Theories]: Hayek critiques non-monetary 'disproportionality' theories (technical, psychological, and investment-based). He argues these theories fail because they assume the price mechanism stops working without explaining why. In a pure 'natural' (barter) economy, interest rates would prevent over-investment. He concludes that these theories implicitly rely on elastic credit (a monetary factor) to explain how imbalances persist, making them incomplete without a monetary foundation. [Chapter 3: Existing Monetary Theories and Their Deficiencies]: Hayek examines existing monetary theories, distinguishing his approach from simple quantity theory. He critiques Wicksell for focusing too much on the general price level rather than relative price distortions. He praises Mises for moving toward a theory of relative price shifts but argues that even Mises remains too tied to 'money value' concepts. Hayek argues that monetary changes cause shifts in the structure of production regardless of whether the general price level changes. [Chapter 4: The Necessity of Recurring Credit Cycles]: Hayek explains why credit cycles are endogenous to the modern banking system. He describes the process of 'deposit creation' by commercial banks, showing how a single bank's actions contribute to a system-wide expansion. Banks do not intentionally cause cycles but respond to increased credit demand by expanding supply, which keeps the money rate of interest below the natural rate. This elasticity is a fundamental feature of modern credit, making cycles inevitable as long as this system exists. [Chapter 5: Tasks for Future Research]: Hayek outlines future research priorities, focusing on the 'natural' vs. 'money' rate of interest and the concept of 'forced saving'. He argues that forced saving (capital accumulation via credit expansion) leads to a distorted production structure that cannot be maintained. He also calls for better statistical analysis of bank deposits and interest rate differentials (money market vs. capital market) to improve economic forecasting and understanding of the cycle's phases. [Index of Names]: An alphabetical index of authors and thinkers mentioned in the text. [Bibliographical Appendix: Works of F. A. Hayek]: A comprehensive bibliography of Hayek's books, pamphlets, edited works, and articles, compiled by Kurt Leube.