Monetary Theory and the Trade Cycle

'Monetary Theory and the Trade Cycle' is a seminal work by Friedrich Hayek, originally published in 1929. In this book, Hayek presents his theory of the business cycle, which emphasizes the role of monetary factors in generating economic fluctuations. He argues that central bank policies, particularly the manipulation of interest rates and credit expansion, are the primary drivers of booms and busts in the economy. Hayek's analysis focuses on the distortions created by artificially low interest rates, which lead to unsustainable investment booms followed by inevitable contractions and recessions.