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 ?
However, his approach may have been too restrictive as it presented things from the point of view of the fundamental concepts of the Austrian School of Economics, which seemed too narrow, limited or too subjective.
Far from banishing history, as is often imagined, Ealy shows that the Austrian school of economics situates history in a useful place and gives it important work to do, the disdain of certain Austrians for the whole discipline notwithstanding.
The "genealogy" of Yeager's teachers suggests ties to both the Austrian School of economics and the Chicago tradition of Frank Knight.
Hicks and Wilhelm Weber, eds., Carl Menger and the Austrian School of Economics. Oxford: Clarendon Press.
The focus of the present work will be on the cost problem, as it is explained by the dumping theory and by an alternative approach in economics, specific to the Austrian School of economics. At the core of the study lies the assumption that the Austrian perspective on the cost problem can deliver a more coherent, consistent and realist approach of dumping theory or predatory prices.
Editor Steven Horowitz presents readers with a collection of academic essays and scholarly articles investigating Austrian economic policy, the nationAEs approach to macroeconomics, and the business cycle theory associated with the Austrian school of economics. The editor has organized the contributions that make up the main body of the text in three parts devoted to Austrian monetary and business cycle theory, the U.S.
The MPS has been associated to classical liberalism, to the Austrian school of economics, and to libertarianism.
A member of the Austrian school of economics, Hayek did not espouse Friedman's positivism.
Central banks' interest rate policies "keep zombie corporations alive and inhibit Schumpeter's Cycreative destruction,' which many argue is the hallmark of capitalism," referring to the notion popularized by Joseph Schumpeter of the Austrian school of economics that some destruction of old hidebound industries is necessary to create the environment where new, vital industries an flourish.
For those working within the Austrian school of economics, this straightforward lesson in methodology must always be followed when addressing inflation, unemployment, and industrial fluctuations.
Others consider state intervention in economic life and discretionary money creation as catastrophic (the Austrian school of economics).
The Austrian school of economics views debt-based investment as a sure way to unsustainable economic growth and rising inequality of incomes.

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