Austrian school


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Austrian School

A school of economics that argues that human behavior is so complex it is extremely difficult or impossible to model. For that reason, it promotes deductive, as opposed to inductive, reasoning in its analysis. It is an extremely individualist school, advocating laissez faire policies and opposing all or nearly all government interventions in the economy. The Austrian School, and particularly its rejection of modeling, has faced criticism from both right- and left-leaning economists. It is so named because most of its founders were born in or around Austria. See also: Ludwig von Mises.

Austrian school

a group of late 19th-century economists at the University of Vienna who established and developed a particular line of theoretical reasoning. The tradition originated with Professor Carl Menger who argued against the classical theories of value, which emphasized PRODUCTION and SUPPLY. Instead, he initiated the ‘subjectivist revolution’, reasoning that the value of a good was not derived from its cost but from the pleasure, or UTILITY, that the CONSUMER can derive from it. This type of reasoning led to the MARGINAL UTILITY theory of value whereby successive increments of a commodity yield DIMINISHING MARGINAL UTILITY.

Friedrich von Wieser developed the tradition further, being credited with introducing the economic concept of OPPORTUNITY COST. Eugen von Böhm-Bawerk helped to develop the theory of INTEREST and CAPITAL, arguing that the price paid for the use of capital is dependent upon consumers’ demand for present CONSUMPTION relative to future consumption. Ludwig von Mises and Friedrich von Hayek subsequently continued the tradition established by Carl Menger et al. See also CLASSICAL ECONOMICS.

References in periodicals archive ?
Time and Money is aptly characterized as the most important book on macroeconomics that the Austrian school has produced since Human Action.
In Vienna in 1920, meanwhile, leading Austrian school economist Ludwig von Mises elaborated the socialist calculation problem: whether economic resources can be allocated efficiently in a planned economy.
Most of their opponents subscribe to the Austrian school of economics, which is allergic to central banks' manipulating markets and asset values, and embraces the current trend.
Well, the Austrian School macroeconomics helped me avoid a financial bloodbath on my own account again now that the GCC markets have fallen 25 per cent
Another scholar, Harry Veryser, argues that it did not have to be this way: Proper attention to the Austrian school of economics could have helped us prevent many economic stumbles, especially the inflationary credit binges that central banking accentuates.
Two powerful schools of thought in the individual liberty tradition are the Austrian school and Ayn Rand's Objectivism.
com)-- The Mises Institute of Canada was founded in 2010 in order to spread the teachings of the Austrian School of Economics.
Holcombe: Advanced Introduction to the Austrian School of Economics.
But according to a guiding principle of the Austrian School of Economics, called the subjective theory of value, something is worth what someone will pay for it (and what someone will accept for it).
As a college student, I studied Ludwig von Mises' Human Action assiduously, seeking in this giant of the Austrian School of Economics a corrective to the socialist message pounded home by most of my professors at Colorado University.
It seems to describe proponents of the Austrian School of Economics, like Keynesian is used to describe devotees of John Maynard Keynes.
Israel Meir Kirzner (born February 13, 1930) is a leading economist in the Austrian School.

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