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 ?
Austrian Business Cycle Theory: Empirical Evidence," Review of Austrian Economics 22, no.
DiLorenzo and Block have rendered an invaluable service to scholars and students interested in Public Choice, Austrian Economics and Libertarianism.
Mises wrote in the tradition of Austrian economics, (3) was associated with the ideas of Friedrich von Hayek, and was a staunch free market advocate.
At this point, suffice it to say that this apparent quandary for purely quantitative theories of decision-making is already under attack in Austrian economics.
Subjective Cost Revisited," Review of Austrian Economics, Vol.
Other recent introductions to Austrian economics have been either at a more introductory level (Gene Callahan, Economics for Real People [Auburn, Ala.
Of course, my curriculum provides students with an introduction to the ideas of liberty, including Austrian economics.
Flourishing and Happiness in a Free Society: Toward a Synthesis of Aristotelianism, Austrian Economics, andAyn Rand's Objectivism.
As the title suggests, the book is an introduction to Austrian economics, but not for economic beginners.
He won several awards including The Templeton Culture of Enterprise Best Article Award, Paper of the Year Award from the Association of Private Enterprise, Best Article Award from the Society for the Development of Austrian Economics and the Foundation for Economic Education, Distinguished Young Scholar Award from the Liberalni Institut and the Prague School of Economics, and Excellence in Graduate Teaching Award from the School of Business and Economics at Fayetteville State University.
The editors allowed an exceedingly broad interpretation of these terms so as to include research on subjectivity and objectivity in the work of Adam Smith (Tetsuo Taka); varieties of subjectivism in Austrian economics (with separate chapters on this subject by Yuichi Shionoya, Yukihiro Ikeda, Shigeki Tomo, Hiroyuki Okon, Chikako Nakayama); subjectivism in the work of Auguste and Leon Walras (Kayoki Misaki); Quetelet and Jevons (Takutoshi Inoue), Sraffa and von Neumann (Yuji Aruka) and modern microeconomic theory (Masahiro Kawamata).
Best of all, Veryser shows how the insights of Austrian economics can be uncoupled from the "anarcho-capitalist" politics with which they are often bundled.

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