His work on the theory of business cycles earned him a Nobel Prize in 1974.
Friedrich A. von Hayek is well-known outside of economic circles -- The Road to Serfdom is a classic of political philosophy. In economics, however, he is a legend. His theory of the business cycle defended free-market economic systems and showed how economic crises were historically the product of manipulation: lowering interest rates to an unnatural level, central banks would induce "overinvestment" and create false booms.
Hayek’s theories sparked a famous debate in the 1930s with John Maynard Keynes, whose work advocated the role of government intervention and regulation in business cycles.