Hayek's contribution to the economic cycleFriedirch August von Hayek was born in Vienna on May 8, 1899 and died on March 23, 1992 in the city of Freiburg in Breisgan, Germany. Hayek was a central figure in 20th-century economics and represented the Austrian tradition. After Hayek completed his military service, he became a student at the University of Vienna where he received his doctorate in law and political science. In 1923-24, 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 debates such as the theories monetary, capital and the economic cycle. during the 1930s. Hayeks' contributions were very important. To describe economic cycles, one must look at the history of a country's overall economic performance. “It is a long-term growth pattern marked by alternations of expansion and contradiction. These recurring alternations above and below the long-term trend are economic cycles” (Outhwaite, 55) . The term “economic fluctuations” is used to describe the same phenomena. Economists have distinguished many causes of the business cycle. There are certain factors external to the economic system and those internal to it. External causes such as war and major inventions are considered exogenous factors. Whereas “endogenous factors belong to the internal functioning of the economy itself and its tendency to fluctuate over long periods” (Outhwaite, 56). Before the Second World War, the emphasis was on endogenous factors, and therefore on theories such as monetary; overinvestment; underconsumption; the psychological aspects were more important than the others. In general, all cycle theories involve some sort of cost mismatch. FA Hayek was one of several economists who, in effect, explained the theory of overinvestment in a monetary sense. The overinvestment theory is linked to overproduction type theories. These theories include consumer goods, capital goods, or investment in money or credit. “They may favor fixed capital over circulating or liquid capital” (Haney, 667). However, overinvestment theory attributed a crucial role to the acceleration principle, according to which "a simple slowdown in the rate of increase in business sales could give... middle of paper ... Butler, Eamonn. Hayek: His contribution to the political and economic thought of our time. United States: Universe Books, 1985. 8-10. Colonna, M., Hagemann, H. and Hamouda, O. Economics of FA Hayek (Vol.2, pp. xii-xiii). Edward Eglar Publishing Limited England. 1994. Haney, Lewis H. History of Economic Thought, The Macmillan Company, 1949. O'Driscoll, Gerald P., Jr. Economics as. Coordination problem: the contributions of Friedrich A. Hayek. Kansas City: Sheed Andrews and Mcmeel, Inc. 1977. 9-11. Outhwaite, William and Tom Bottomore. The Blackwell Dictionary of Twentieth-Century Social Thought Oxford: Blackwell Publishers, 1993. 55-57. Palgrave, Robert Harry Inglis. "Friedrich August von Hayek". The new Palgrave: Dictionary of Economics (Vol. 2, pp. 609-10). USA. C 1987. Palgrave, Robert Harry Inglis. “Ricardo-Hayek effect”. The New Palgrave: A Dictionary of Economics. (Vol. 4, pp. 198-99). The Macmillan Press Limited. USA. C 1987. Spiegel, Henry. The growth of economic thought. New Jersey: Prentice-Hall, Inc., 1971. 543-44. Tomlinson, Jim. Hayek and the market. London: Pluto Press. 1990. 5-6.