Monetary Theory and the Trade Cycle.

HAYEK, Friedrich A. [F.A.].

Item Number: 142258

New York: Harcourt Brace & Co, 1933.

First edition in English of this early classic work by the Nobel Prize-winning economist. Octavo, bound in full morocco by the Harcourt bindery, gilt titles and tooling to the spine in six compartments within raised gilt bands, gilt ruling to the front and rear panels, gilt inner dentelles stamp-signed by the Harcourt Bindery, marbled endpapers, all edges gilt. Translated from the German by N. Kaldor and H.M. Croome. In fine condition.

The present volume, Hayek's first book, was first in his series 'Contributions to Trade Cycle Research' published by the Austrian Institute for Trade Cycle Research, founded by von Mises and directed by Hayek from 1927 to 1931. Hayek's contributions to monetary theory and trade theory are closely linked. Here, he integrates the idea of money as a medium of exchange with the idea of the price system as a communication network. His trade-cycle theory consists of integrating monetary theory and capital theory in which a particular aspect of the price system, namely the system of international prices is emphasized. The Austrian theory of the trade cycle was first formulated by von Mises who showed that money-induced movements in the interest rate have identifiable effects on the capital structure. Hayek's improvements were based on an extremely stylized portrayal of the economy's time-consuming production process (New Palgrave, vol. 2 609-613). Hayek's analysis is powerful, and represents an alternative explanation of economic disequilibrium to that of Keynes.