Quarterly Journal of Austrian Economics
The Fraud of Macroeconomic Stabilization Policy
Volume 3, No. 3 (Fall 2000)
The conventional wisdom proposition suggested by Galbraith that there is endemic instability in a market-based economy that can be remedied only by government policy interventions is inappropriate. Also, it is clear that Mises's vision of the nature of the macroeconomy is substantiated by our findings. The notion that deliberate contracyclical macroeconomic policy can stabilize the economy is a fiction. Nevertheless, in an almost classic display of what Hayek calls "the fatal conceit," contemporary mainstream economists continue to believe in the efficacy of such policy.