The “values-riches” model: An alternative to garrison’s model in austrian macroeconomics of growth and cycle

Abstract

The “values-riches” model is a pedagogical and graphical representation of Austrian macroeconomics, combining four elements: the concept of “invariable money” (Reisman 1996), the capitalization theory of interest of Fetter (1904, 1914) and Mises (1998), the Hayekian structure of production (Hayek 1931), and the growth theory of Böhm-Bawerk (1959). This model offers a simple visual illustration of equilibrium, growth, and business cycle as they may be conceived in an Austrian framework.