Prices and Production

Historical Context and Significance

Published in 1931, Friedrich von Hayek's «Prices and Production» is one of the key works in economic theory, especially within the context of the Austrian School of Economics. In this book, Hayek develops the theory of capital and business cycles, explaining how changes in the money supply and interest rates can influence the structure of production and economic activity. Hayek's work became an important contribution to discussions on the nature and causes of economic cycles, contrasting his ideas with Keynesian theory, which was gaining popularity at the time. The book significantly influenced economists interested in the dynamics of prices and production processes and helped strengthen the position of the Austrian School in economic science. It also played a role in shaping views on monetary policy and economic regulation, highlighting the importance of market mechanisms and spontaneous order.