Have the Austrians abandoned capital-theory?

Roger Garrison (2001, Chapter One) writes:

"Some members of the [Austrian] school have long turned a blind eye to the issues of business cycles and to macroeconomics more broadly conceived. Classics in Austrian Economics: A Sampling in the History of a TraditionAustrian School of Modern Economics: Essays in Reassessment (1994) gives no clue of the existence of a modern Austrian macroeconomics. Karen Vaughn's Austrian Economics in America: The Migration of a Tradition (1994) leaves the impression that macroeconomics never reached - or possibly shouldn't have reached - the American shore. And in her recent reflections on the development of the Austrian tradition (1999), she hints that progress is to be measured in part by the school's distancing itself from the issues associated with the business cycle."

Clearly, Kirzner (1994), Foss (1994) and Vaughn (1994) find Austrian Business Cycle Theory indefensible and have attempted to distance themselves from it.

Garrison believes that the theory of Hayek and Rothbard can be salvaged and has added a new innovation, attaching Hayek's triangle to the Production Possibilities Frontier, PPF, in an attempt do just that. Garrison is, in fact, so proud of this new innovation that he displays it prominently on the home page of his website.

I criticize this innovationsustainable combinations of investment and consumption, but says nothing about what is so unsustainable about a credit expansion. Since he defines consumption on the PPF (which is real) to be the same as consumption on the Hayekian triangle (which is nominal), the unsustainability cannot have anything to do with a devaluation of the currency."

A quick trip to the dictionary should clear things up:

Production Possibility Frontier, PPF: This curve shows the possibilities open for increasing the output of one good by reducing the output of another... Note that any points outside the frontier are unobtainable.

Source: MIT Dictionary of Modern Economics

No economist believes that "unobtainable" and "unsustainable" are the same thing - Garrison has pulled the ol' switcheroo on us! So what does "unsustainable" mean in Garrison's lexicon? Nobody knows. Since he defines consumption on the PPF (which is real) to be the same as consumption on the Hayekian triangle (which is nominal), the unsustainability cannot have anything to do with a devaluation of the currency. He has (apparently inadvertently) defined away the only real problem that credit expansions face: inflation.

Even his own comrades were left befuddled by this language. writes:

"The first thing to notice is that Garrison (pp. 44 and 70) employs a rather idiosyncratic definition of the PPF. In his eyes, the 'PPF represents sustainable combinations of consumption and investment.' Thus the PPF is not a choice-independent physical limitation of human action, but a permeable frontier, which in economic booms can be transgressed at least for short periods, albeit at the price of necessary busts at some later point of time. This unusual use of language is likely to spur misunderstandings and misinterpretations... It is one thing to draw a curve and say that it represents a limit for sustainable combinations of alternative production processes. It is another thing to explain why combinations are sustainable or unsustainable."

Indeed. Another thing entirely.

My question stands:

Have the Austrians abandoned capital theory?

Did Garrison salvage Hayek's theory with his new innovation or were Kirzner, Foss and Vaughn right to abandon Hayek?

REFERENCES

Foss, Nicolai. 1994. The Austrian School of Modern Economics: Essays in Reassessment. Copenhagen, Netherlands: Handelshojskolens

Garrison, Roger. 2001. Time and Money: The Macroeconomics of Capital Structure. New York, NY: Routledge

Kirzner, Israel (editor). 1994. Classics in Austrian Economics: A Sampling in the History of a Tradition. London, England: William Pickering

Vaughn, Karen. 1994. Austrian Economics in America: The Migration of a Tradition. Cambridge, England: Cambridge University Press