The Hayek Triangle

Pavel Potuzak
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Pavel Potuzak: Prague University of Economics and Business

Chapter Chapter 3 in Austrian Theory of Capital and Business Cycle, 2022, pp 21-38 from Springer

Abstract: Abstract This chapter introduces a modelling tool developed by Friedrich August von Hayek, the Hayek triangle, which is used to describe capital structure. At its heart is a discussion with Frank Knight and his idea that capital represents a homogenous mass that is automatically maintained. The model shows that capital has its own structure that cannot be ignored, and that the maintenance of capital is not automatic. This chapter also introduces the natural rate of interest and its relation to the slope of the Hayek triangle.

Keywords: Austrian capital theory; Hayek triangle; Heterogenous capital; Natural interest rate (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-18728-5_3

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DOI: 10.1007/978-3-031-18728-5_3

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