• Austrian economics;
  • business cycle;
  • easy money;
  • Friedrich Hayek;
  • Keynesianism

Friedrich Hayek's foreboding of the Great Crash would have been equally relevant for the Credit Crunch. It was based upon precepts that have never been taken up by the economics mainstream. Although Maynard Keynes set no store by quantification, mathematical modelling of the economy and statistical analysis saturate the journals. Thoughtful analysis per se carries little weight if it does not lend itself to econometric confirmation, which means that Hayek's microeconomic analysis of the impact of easy-money policy and the mechanisms that best explain the débâcles of 1929 and 2008 are again likely to be ignored.