Synthesis of The Yeager and Austrian Theory
Monetary disequilibrium theory has always been a part of the Austrian Monetary theory.Significant features of the monetary-disequilibrium theory except the inclusion of the stable price level have been present in the Austrian theory for a long time now. Mostly modern Austrian economists emphasize on the effects of inflation than the harm caused by rapid deflation. This is mainly because inflation is a more immediate problem in the current system and deflation is a result of prior inflation. Over the last few years preventing deflation by inflating the money supply has quite worked out and thus it would be better if we limit the monetary expansion on the first place.
Leland Yeager's theory of monetary disequilibrium is simpler than the Austrian School of thought but it leaves out important parts of the economic system and hence provides an incomplete view of the business cycles. Austrian theory being simple is the only theory that places business cycles in the full context of a functioning economy.
Read more about this topic: Monetary-disequilibrium Theory
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