Martin Wolf, writing in the paid subscriber section of the Financial Times, has written a somewhat heterodox piece about business cycles, including this passage:
Because people make exceptionally large mistakes, orthodox neoclassical economics does not work very well. A more helpful guide is the Swedish-Austrian theory of the business cycle, developed by Knut Wicksell, the Swedish economist, and Friedrich Hayek, the Austrian, in the 1920s and 1930s. During such periods, they argued, the real interest rate is too low and monetary policy too loose, given the over-optimistic view of prospective returns on capital.
