• us-money

    Consumption, Savings, and Investment

    Calling all Austrian economists, free-market enthusiasts and advocates for economic prosperity! Join the Boston Austrian Economics Group as we meet to discuss Chapters 7 & 8 of Keynes’ “General Theory”, as well as Chapters 7 & 8 of Hazlitt’s line-by-line critique of it titled “Failure of the New Economics.” The readings are strongly encouraged, but not required to attend our meeting. See you then!


    The General Theory of Employment, Interest, and Money
    J.M. Keynes: Chapters 7 & 8

    Text is available online at: http://cas.umkc.edu/economics/people/facultypages/kregel/courses/econ645/winter2011/generaltheory.pdf

    The Failure of the New Economics
    Henry Hazlitt: Chapters 7 & 8

    Text is available online at: https://mises.org/sites/default/files/Failure%20of%20the%20New%20Economics_4.pdf


    1. According to Keynes, capital consumption and capital formation occur, under which circumstances, in the Austrian school?
    2. According to Hazlitt, how is equilibrium static, and which three examples are used?
    3. Which phenomenon, according to Keynes, is measured by changes in the quantity of money, and which other factor contributes to this phenomenon?
    4. How did Keynes distinguish between saving and investment, and what was Hazlitt’s critique?
    5. Which six factors influence the propensity to consume, and based on these, what is Keynes conclusion?
    6. According to Hazlitt, what contributes to an unreduced volume of sales at lower prices, and how does this apply to saving and investment?
    7. According to Hawtrey, why is output significant to entrepreneurs, and how does fixed capital play a role?
    8. According to Hazlitt, what is the villain in the world of Keynes?
    9. Keynes claimed sinking funds and depreciation allowances were the result of which phenomenon, and how are these provisions absorbed?
    10. According to Hazlitt, what is the critique Keynes has of entrepreneurial investment, and this equates to what phenomenon?
    11. What is the objective of all economic activity, and how does aggregate demand factor in to this dynamic?
    12. How does the capitalist perspective on savings differ from the laborer’s perspective?


    1. According to Keynes, how does a “first alternative” differ from a “second alternative,” and what role does consumption play in the loss of wealth?
    2. According to Hazlitt, why is today’s savings not necessarily tomorrow’s investment, or why may today’s investment not necessarily be yesterday’s savings?
  • oldfactory

    Austrian Capital Theory


    Garrison Lect-1. 1 Capital Theory
    Slides by Dr. Roger Garrison

    Garrison Lect-1. 4 Hayek and Friedman
    Slides by Dr. Roger Garrison

    Garrison Lect. 3 Hayek and Keynes
    Slides by Dr. Roger Garrison


    Austrian Capital Theory
    Lecture by Dr. Roger Garrison, Mises University 2013

    Hayek and Friedman: Head to Head
    Lecture by Dr. Roger Garrison, Mises University 2013

    Hayek and Keynes: Head to Head
    Lecture by Dr. Roger Garrison, Mises University 2013


    1. What (if anything) is the unit of capital?
    2. What are the differences between Knight’s and Hayek’s capital theorems?
    3. Why does Knight say that time is irrelevant? How does Hayek refute him?
    4. What happens to the structure of production when savings are increased? Decreased? Why?
    5. What is the role of maintenance in the capital structure? Is capital constant or permanent?
    6. In what sense does Friedman agree with Keynes when it comes to economics? In what ways do they differ?
    7. How do the Austrian School and Chicago School differ in their methodology? How does this affect their analyses?
    8. Why does Friedman dismiss interest rates as being a variable when describing recessions?
    9. What is the money velocity equation? Is this a valid concept?
    10. How does the Austrian School use statistics?
    11. What are the methodological differences between the “circular-flow” framework and the “means-ends” framework? How does the concept of equilibrium differ between the  two views?
    12. What causes the bust to occur in the Keynesian framework? How is this fundamentally different from the Austrian School?
    13. Keynes insisted that savings and investment are not influenced by the interest rate. Why is this rejected by Hayek (and the rest of the Austrian School)?
    14. What was the one graph included in Keynes’ General Theory? Why was this graph included?
    15. Why does Garrison separate consumption and investment in the PPF?
  • Jeffrey-Tucker

    The Pre-Austrians


    “Richard Cantillon: The Origin of Economic Theory”
    “A.R.J. Turgot: Brief, Lucid, and Brilliant”
    “Jean-Baptiste Say: Neglected Champion of Laissez-Faire”
    Holcombe, ed., Fifteen Great Austrian Economists, chapters 2–4


    The Pre-Austrians
    Rothbard, Classroom Lecture from 1985


    1. What was Cantillon’s lone surviving work on economics?
    2. Is it appropriate to call Adam Smith the father of economics?
    3. What were Cantillon’s methodological views?
    4. Was Cantillon’s concept of “intrinsic value” at odds with modern subjectivist economics?
    5. What is “spatial economics”?
    6. How did Cantillon’s monetary views anticipate the Austrian approach?
    7. How did Turgot’s prose compare to that of the Physiocrats?
    8. How did Turgot anticipate Hayek?
    9. What technique did Turgot use in his exposition of value theory?
    10. Why does Rothbard lament Turgot’s “equal exchange value” discussion?
    11. How did Turgot explain interest?
    12. Name some of Say’s works.
    13. What was the relation between the work of Say and Adam Smith?
    14. Discuss Say’s monetary views.
    15. What is Say’s Law of Markets? Why did Keynes attack it?