The boom

This is the core course of the track. Everything before it exists to make these eight lessons readable.

Mises set out the mechanism in The Theory of Money and Credit, published in German in 1912 and in English in 1934, and restated it in Human Action in 1949. Hayek supplied the account of relative prices that Mises had left in a few sentences, in Monetary Theory and the Trade Cycle, published in German in 1929 and in English in 1933, and in Prices and Production in 1931. Rothbard put the whole of it in one chapter of America's Great Depression in 1963.

Eight lessons. The first states the claim once, in order, with the author who added each step named. The second is forced saving, which is the thing the theory says is happening while nobody notices. The third is the question any theory of the cycle has to answer: why do errors cluster instead of cancelling.

The fourth insists on a distinction the tradition will not give up, between investment that is wrong and investment that is merely too much. The fifth and sixth compute what a rate change does to different stages, using the chain from the previous course.

The seventh is the mechanism Hayek added in 1939 and the argument it started, which was not settled.

The eighth is the most important lesson in the track. A theory stated so that nothing could count against it is not a theory. That lesson writes down the claim in a form that could be wrong, names what it is often taken to claim and does not, and hands the reader straight to the course on the case against it.

Nothing here is a forecast, a policy position or a view about any security, and ValueScreener gives no advice.