Walter Block and William Barnett on Problems With the Hayekian Triangle

We interview famed economists Block and Barnett, on whether the Hayekian triangle—the popular device used to illustrate how artificially low interest rates lead to an unsustainable boom—can be salvaged or should be abandoned altogether.

In a 2006 journal article, “On Hayekian Triangles,” Walter Block and William Barnett list 14 separate objections to the popular device used (in various forms) by Hayek, Rothbard, and Roger Garrison to illustrate how artificially low interest rates lead to an unsustainable boom. Block concludes that the Hayekian triangle can be salvaged, while Barnett thinks it should be abandoned altogether.