ABSTRACT
The contributions of the Austrian School to macroeconomics are commonly seen as being limited to the issues surrounding the business cycle or even more narrowly to the issues pertaining to the upper turning point of the cycle. It is as if mainstream, labor-based macroeconomics is perfectly adequate for all circumstances except those that prevail on the eve of the bust. In those rather special circumstances, the multistage structure of production, the notions of roundaboutness and production time which vary with the interest rate, and all the other thorny issues of capital theory must be ushered in to explain the waning of the boom and the inevitable reversing of the direction of movement of output, income, and expenditures, after which the mainstream macroeconomics again becomes perfectly adequate. This view stands in contrast to the one offered here. While the Austrian theory of the business cycle identifies a special twist in macroeconomic relationships and, for that reason, has become the primary focus of Austrianoriented macroeconomics and particularly of business cycle theory, the Austrian theory is much more generally applicable than commonly appreciated.
