Mario Rizzo nails the relevant issues in the debate over Hayek’s importance as a macroeconomist. (HT Steve Horwitz)
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On this same topic, Troy Camplin quotes Brad DeLong:
Friedrich von Hayek is only a very minor and very unproductive figure in the work of macroeconomics. He–and Schumpeter, von Mises, and the rest of them–spent a lot of time figuring out why it might be that when you learned that you had overinvested and overborrowed, the natural and necessary thing to do was to shutter (rather than repurpose) factories and send your workers home to eat Cheetos and watch “The Real Housewives of Galt’s Gulch”.
To reinforce Troy’s point: DeLong’s interpretation of Hayek is utterly mistaken. First, Hayek’s theory of boom and bust was not one of over-investment; it was one of mal-investment. (Arnold Kling would say something like ‘investments of resources in unsustainable patterns of specialization and trade.”) Second, and relatedly, Hayek emphasized the need to “repurpose” factories and other resources (including labor). To accuse Hayek of simply wishing “to shutter (rather than repurpose) factories and send your workers home” to remain idle indefinitely is to egregiously misunderstand Hayek.
