Volume 10, No. 3 (2007)
Does Structuralist unemployment theory in the spirit of Edmund S. Phelps (1994) contain Austrian elements? Austrian macroeconomics concerns itself with the intertemporal capital structure and entrepreneurial expectations. This paper shows that Structuralist theory is “Austrian” by being dynamic and considering entrepreneurial expectations which are however rational. Yet, by neglecting the intertemporal capital structure and the monetary process which leads to credit-induced booms and bust, Structuralist theory misses the core element of Austrian macroeconomics.
