Knowledge and Coordination and Business Cycles
Studies in Emergent Order, Vol. 7, 2014
Daniel Klein’s book Knowledge and Coordination is a fascinating look at two topics crucial to economic theory. Given the book’s focus, it might seem natural that there would be some attention paid to business cycles, but the topic is absent from its pages. The aim of this paper is to see how the framework Klein offers, particularly his concepts of “concatenate coordination” and “mutual coordination,” might be used to shed some light on business cycles. We do so beginning with an analysis of the simplest type of cyclical social behavior of which we can conceive, move on to analyze a somewhat more complex phenomenon such as fads, then investment cycles, and finally, we examine two variations of business cycle theory, one broadly “Austrian” and the other developed by Hyman Minsky.