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 ?
A Critique of Neoclassical and Austrian Monopoly Theory, in New Directions in Austrian Economics.
I was expecting an interview on Austrian economics.
This paper synthesizes the frameworks and methodologies of Historical Archaeology and Austrian Economics in an effort to combat historical essentialisms.
But in the intervening decade, Austrian economics in general and Hayek's work in particular have experienced a newfound, if sometimes grudging, respect.
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Austrian economics is a disequilibrium-based understanding of how firms interact in markets.
Nodding to Austrian economics, Fukuyama maintains that the disciplines engendered by a system of free choice work to extend the predisposition of the species toward social capital formation.
T]here is no Austrian economics - only good economics, and bad economics.
THE Austrian Economics Minister has called off the operation to rescue ten men trapped in a mine by a mudslide after the previous attempt ended in failure, despite rescuers working around the clock for four weeks.
by Hoover visiting fellow Hans Halbheer, CBE and Member, Advisory Council, Swiss American Foundation; "Sweden: from Neutrality to Military Non-Alignment" by Tomas Rosander, Swedish Consul General in Los Angeles; "Still a Powder Keg: The European South East" by Erhard Busek, Special Coordinator, Stability Pact for South Eastern Europe; and "Friedrich Von Hayek's Efforts to Rejuvenate Austrian Economics, 1945-1955" by Hoover research fellow Kurt Leube.
The book's introduction provides a significant discussion of the function and importance of Austrian economics in the study of the humanities.
He questions the optimization approach as a suitable candidate, and he will throughout the book reject Humean and Kantian philosophy as well as Austrian economics.

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