MONEY, BUSINESS CYCLE AND FUNDAMENTAL UNCERTAINTY IN HAYEK

Abstract

The article aims at investigating how F. A. Hayek’s monetary and business cycle theory implicitly assumes the existence of fundamental uncertainty. In order to achieve such a goal, the authors make a short exposition of the concept of fundamental uncertainty as defined by Dequech in several of his works. Afterwards, the authors expose the Hayekian interpretation on the central role of money and credit on business cycle, on the mechanism of forced saving and on the possibility of falsification of interest rate and the possibility of the economic system to behave away from the equilibrium. It can be said, then, that the price system may not supply the agents with the information that is necessary for the formation of correct expectations and decisions, a key characteristic of fundamental uncertainty.