The role of ideal types in Austrian business cycle theory

Callahan, Gene; Horwitz, Steven

doi:10.1108/s1529-2134(2010)0000014013

Cited by 15 publications

(7 citation statements)

References 10 publications

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“…That means an ideal type scheme has an explanatory character concerning the causal relationship of economic aspects. Callahan and Horwitz (2010) argued that an ideal type ought to have two sorts of adequacy: (1) an explanatory character; and (2) a causal adequacy. Causal adequacy means that there are cases in reality which are very similar to the ideal type scheme.…”

Section: Methodsmentioning

confidence: 99%

The Behavior of Hedge Funds and the Theory of the Business Cycles

Gerhard¹

2016

UCPA

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The paper aims to find whether there is a typical theoretical behavior of hedge funds with specific strategies in the different phases of the business cycle. There are only few papers which have analyzed the empirical behavior of hedge fund during the different phases of the business cycles. The method used in this paper is the construction of an ideal type which is based on the famous concept of Max Weber. The ideal type is composed of individual phenomena, some of which are diffuse and discrete and others of which do not even exist in reality. Viewpoints are accentuated one-sidedly and synthesized into a unified analytical construct. However, the conceptually pure ideal type cannot be found (exactly) anywhere in reality. The reason for a theoretical examination is that the empirical studies just show that there is a relationship between the variables, but do not have an explanatory character. The assumption is that, for many hedge funds strategies, an ideal type behavior of hedge funds exists for the different phases of the business cycles so that the behavior has definitely a cyclical aspect.

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Section: Methodsmentioning

confidence: 99%

The Behavior of Hedge Funds and the Theory of the Business Cycles

Gerhard¹

2016

UCPA

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“…3 Praxeology, ideal types, and Austrian business cycle theory I have offered "Austrian" perspectives on the Great Recession in a number of recent papers (Horwitz and Boettke 2009;Horwitz 2010;Callahan and Horwitz 2010;Horwitz and Luther 2011). In this work, the core theoretical element is the Austrian theory of the business cycle with its focus on the ways in which excess supplies of money distort interest rates, thereby causing intertemporal discoordination that manifests first as a boom then a self-correcting bust.…”

Section: Theory and Historymentioning

confidence: 97%

“…5 Garrison (2001) is one of the few examples, where he mentions it as a possible path for an excess supply of loanable funds on the consumption side. 6 In Callahan and Horwitz (2010), we argue that even the "praxeological" claims are ideal types, though ones that apply to homo agens, or the highly anonymous "human actor." At the very least, they apply to the nearly as anonymous "money user."…”

Section: Theory and Historymentioning

confidence: 98%

“…In Callahan and Horwitz (2010), we offer a list of possible ideal types that could be in play in any application of the Austrian theory: Again, these are not praxeological categories, as they may not be present in any and all cases where humans act. We can imagine human action without them.…”

Section: Theory and Historymentioning

confidence: 99%

“…The interested reader should see the argument there. 7 The discussion to follow borrows heavily from Callahan and Horwitz (2010).…”

Section: Theory and Historymentioning

confidence: 99%

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Theory, history, and the great recession

Horwitz

2011

Rev Austrian Econ

Self Cite

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This paper honors Don Lavoie's work on the relationship between theory and history in Austrian economics by using the current recession as an example of many of the ideas found in his paper on the "Interpretive Dimension of Economics." More specifically, I start from the premise that all history comes from theory because it is theory that guides what we count as "facts" or "data." From Menger onward, a core element of the Austrian approach has been to see the purpose of theory as rendering human action and its unintended consequences intelligible. We do that by telling historical narratives where theory is the logical glue that holds the story together. I look at the Austrian story of the Great Recession in light of these ideas. What the Great Recession demonstrates is that the core theoretical elements of Austrian business cycle theory are narrower than we might think, but that consciously recognizing the contingent elements gives the theory additional flexibility to explain more of various real-world crises when augmented by additional ideal typifications properly used.

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The Mises-Hayek business cycle theory, fiat currencies and open economies

Cachanosky

2012

Rev Austrian Econ

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The role of ideal types in Austrian business cycle theory

Cited by 15 publications

References 10 publications

The Behavior of Hedge Funds and the Theory of the Business Cycles

The Behavior of Hedge Funds and the Theory of the Business Cycles

Theory, history, and the great recession

The Mises-Hayek business cycle theory, fiat currencies and open economies

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