The Hayekian cycle does not require everyone to misjudge the future path of interest rates—it only requires that too many people guess wrong; malinvestments piggyback on sustainable investments precisely because people are convinced 'this time is different' (a new era), an idea central banks like Greenspan sometimes actively encouraged.

causalpending

Speaker

Larry White

Evidence Quote

it just requires that too many people guess wrong about the future path of interest rates in order to get enough malinvestment to cause a problem

Source

Larry White on Hayek and Money 02/01/2010EconTalk
Created: 6/17/2026, 10:31:20 AM

My Notes

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