Hayek's Monetary Reform Proposals : from Abstract to Concrete

Friedrich Hayek's views on monetary reform remarkably changed during his lifetime. From an initial stance of defending the gold standard and identifying credit stabilization as the primary goal of monetary policy, Hayek eventually shifted to supporting price stabilization and even proposed ending the central bank's monopoly on money. This article sheds light on these discrepancies by integrating Hayek's work as an economist with his research outside the field of pure economics. Hayek's enquiries concerning monetary influences on real economy, as explored in The Pure Theory of Capital, as well as his development of the category of the abstract in his epistemological research, can help clarifying his transition from credit stabilization to price stabilization and his abandonment of a fixed mechanism in favor of a competitive process for the establishment of the optimal currency. [Publisher's Text].