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Friedirch August von Hayek was born in Vienna on May 8 1899 and died on March 23 1992 in the city of Freiburg in Breisgan in Germany Hayek was a central figure in 20th-century economics and he represented the Austrian tradition After Hayek served military service he became a student at the University of Vienna where he got his doctorate in law and political science In 1923-4 Hayek visited New York and then returned to Vienna where he continued his work Hayek became the first director of the Austrian Institute for Business Cycle Research in 1927 He also gave some lectures in England at the London School of Economics in 1931 In England he participated in such debates as monetary capital and business-cycle theories during the 1930s Hayeks contributions were very important To describe business cycles one has to examine the historical record of a nations overall economic performance It is a pattern of long-term growth marked by alternations of expansion and contradiction These recurrent alternations above and below the long-term trend are business cycles Outhwaite 55 The term economic fluctuations is used to describe the same phenomena Economists have distinguished many cause of the business cycle There are some factors outside the economic system and those within it Outside causes such as war and major inventions are referred to exogenous factors Whereas endogenous factors belong to the internal working of the economy itself and its tendency to fluctuate over extended periods Outhwaite 56 Before World War II the emphasis was put on endogenous factors and thus theories such as monetary overinvestment underconsumption psychological were more important than others In general all cycle theories involve some kind of cost maladjustment F A Hayek was one of the many economists who indeed explained overinvestment theory in a monetary sense Overinvestment theory is related to the overproduction-type theories Those theories include consumer goods capital goods or investment of money or credit They
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