Hayek and the General Theory

Nicolo De Vecchi

The European Journal of the History of Economic Thought, 2006, vol. 13, issue 2, 233-258

Abstract: Hayek did not review the General Theory, but he criticized it in Profits, Interest and Investment (1939) and in part IV of The Pure Theory of Capital (1941). First, he showed that only exceptionally does greater consumption favour investment and employment. Second, he rejected Keynes's liquidity preference and maintained that only in an 'extreme case' might it be said that Keynes's theory of the rate of interest is valid. Although he correctly identified the gist of Keynes's theoretical innovation, his criticisms were already implicitly answered in the General Theory.

Keywords: Hayek; 'General Theory'; Keynes; liquidity preference; consumption; investment (search for similar items in EconPapers)
Date: 2006
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DOI: 10.1080/09672560600708284

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