This work examines the Hayek-Keynes debate on business cycle theory and argues that the key issues at the heart of the controversy in the areas of money, interest and capital theory are much neglected in current macroeconomic modelling.
Part 1 Introduction: introduction to the drama. Part 2 Hayek, Keynes, and classical monetary theory: monetary theory and coordination; the "Wicksell connection"; Keynes and the quantity equations; Hayek and the theory of prices. Part 3 An interpretation of the Kayekian: methodology of the trade cycle theory; the foundations of a theory of the trade cycle; capital theory and the theory of the trade cycle; the self reserving nature of a monetary change; crisis, unemployment and policy implication; the use and abuse of equilibrium in business cycle theory - a praxeological approach. Part 4 The drama revisited and updated: the Hayek-Keynes debate - lessons for contemporary business cycle theorists.