The problems of the co-ordination problem
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AutorDurán, Miguel Ángel
Universidad de Granada. Departamento de Teoría e Historia Económica
Hayekian theoryKeynesian theoryCo-ordination problemInstitutions
Durán, M.A. The problems of the co-ordination problem. Universidad de Granada. Departamento de Teoría e Historia Económica (2005). (The Papers; 05/09). [http://hdl.handle.net/10481/31470]
This paper is focused on the Hayekian understanding of the operation of the market as the continuous solution of a co-ordination problem in a decentralised decision-making system. The aim is to show the reasons why the solution of this problem is imperfect. These reasons lie, on the one hand, in deficiencies in the mechanisms to which Hayek ascribes the task of solving the co-ordination problem and, on the other hand, in the implications of the Keynesian view on expectations and the workings of the market process. In this regard, the problem of co-ordination in a Hayekian world would have different implications if Keynes’s theory were taken into consideration and the possibility of mistakes in an uncertain world were not underestimated.