Jump to content

Austrian school of economics: Difference between revisions

From Wikipedia, the free encyclopedia
Browse history interactively
← Previous editNext edit →
Content deleted Content added
VisualWikitext
→‎Theoretical objections: Removing blog post by Rosenthal and weakly-sourced Dempsey statement that does not respond to Caplan's point. Murphy is notable economist and speaks to Caplan's point.
→‎Inflation: added Copernicus
Line 48: Line 48:
===Inflation===
===Inflation===
{{See also|Monetary Inflation}}
{{See also|Monetary Inflation}}
Mises believed that money prices and wages will inevitably rise when the quantity of money and bank credit is increased.<ref>{{Cite book |first=Ludwig |last=von Mises |chapter=Economic Freedom and Interventionism |editor1-first=Bettina B. |editor1-last=Greaves |title=Economics of Mobilization |publisher=The Commercial and Financial Chronicle |location=Sulphur Springs, West Virginia |pages= |year=1980 |isbn= |chapterurl=http://mises.org/efandi/ch20.asp |ref=harv |quote="Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term "inflation" to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. . . . As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil. They try to keep prices low while firmly committed to a policy of increasing the quantity of money that must necessarily make them soar. As long as this terminological confusion is not entirely wiped out, there cannot be any question of stopping inflation."}}</ref> He therefore used the term "inflation" to mean an excessive increase of the money supply and not, as is the common usage, to refer to [[inflation|price inflation]]. In Mises' view, inflation is the result of policies of the government or central bank which result in an increase in the circulating money supply.<ref>Ludwig von Mises, [http://mises.org/books/Theory_Money_Credit/Contents.aspx The Theory of Money and Credit]", ISBN 978-0-913966-70-9 </ref> Following Mises, the modern-day Austrian School argues that this semantic distinction is critical to public discussion of price inflation, and that price inflation can only be prevented by strict control of the money supply. Mises wrote:
Mises believed that money prices and wages will inevitably rise when the quantity of money and bank credit is increased,<ref>{{Cite book |first=Ludwig |last=von Mises |chapter=Economic Freedom and Interventionism |editor1-first=Bettina B. |editor1-last=Greaves |title=Economics of Mobilization |publisher=The Commercial and Financial Chronicle |location=Sulphur Springs, West Virginia |pages= |year=1980 |isbn= |chapterurl=http://mises.org/efandi/ch20.asp |ref=harv |quote="Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term "inflation" to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. . . . As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil. They try to keep prices low while firmly committed to a policy of increasing the quantity of money that must necessarily make them soar. As long as this terminological confusion is not entirely wiped out, there cannot be any question of stopping inflation."}}</ref> commonly known as [[Quantity theory of money]] first noted by [[Copernicus]]<ref>Nicolaus Copernicus (1517), memorandum on monetary policy.</ref>. He therefore used the term "inflation" to mean an excessive increase of the money supply and not, as is the common usage, to refer to [[inflation|price inflation]]. In Mises' view, inflation is the result of policies of the government or central bank which result in an increase in the circulating money supply.<ref>Ludwig von Mises, [http://mises.org/books/Theory_Money_Credit/Contents.aspx The Theory of Money and Credit]", ISBN 978-0-913966-70-9 </ref> Following Mises, the modern-day Austrian School argues that this semantic distinction is critical to public discussion of price inflation, and that price inflation can only be prevented by strict control of the money supply. Mises wrote:


<blockquote>
<blockquote>

Revision as of 10:38, 10 April 2013

Part of a series on the
Austrian School
Principal works
Origins
Theories and ideologies
Organizations, Universities, and Think Tanks
People
Variants and related topics
icon Business and economics portal

The Austrian School of economics is a school of economic thought which bases its study of economic phenomena on the interpretation and analysis of the purposeful actions of individuals.[1][2][3][4] It derives its name from its origin in late-19th and early-20th century Vienna with the work of Carl Menger, Eugen von Böhm-Bawerk, Friedrich von Wieser, and others.[5] Currently, adherents of the Austrian School can come from any part of the world, but they are often referred to as "Austrian economists" or "Austrians" and their work as "Austrian economics".

Among the contributions of the Austrian School to economic theory are the subjective theory of value, marginalism in price theory, and the formulation of the economic calculation problem.[6]

Many economists are critical of the current-day Austrian School and consider its rejection of econometrics, experimental economics and aggregate macroeconomic analysis to be outside of mainstream economic theory, or "heterodox".[7][8][9][10] Austrians are likewise critical of mainstream economics.[11] Although the Austrian School has been considered heterodox since the late 1930s, it began to attract renewed academic and public interest starting in the 1970s.[12]

Methodology

Ludwig von Mises
Israel Kirzner
Main articles: Action axiom, Catallactics, and Praxeology

The Austrian School differs significantly from many other schools of economic thought in that the Austrian analysis of the observed economy begins from a prior understanding of the motivations and processes of human action. The Austrian School follows an approach, termed methodological individualism, a version of which was codified by Ludwig von Mises and termed "praxeology" in his book published in English as Human Action in 1949.[13] Mises was the first Austrian economist to present a statement of a praxeological method. Since that time, few Austrian thinkers have adopted his approach and many have adopted alternative versions.[14] For example, Fritz Machlup, Friedrich von Hayek, and others, did not take Mises' strong a priori approach to economics.[15]

Mises argued against the use of probabilities in economic models. Instead, his praxeological method is based on deductive arguments from what are considered undeniable, self-evident axioms, or irrefutable facts, about human existence. According to Mises, deductive economic thought experiment, if performed correctly, can yield conclusions that follow irrefutably from the underlying assumptions and could not be discovered by empirical observation or statistical inference.[16] However, economist Bryan Caplan has stated that the Austrian challenge to the realism of neoclassical assumptions actually helps make those assumptions more plausible.[17]

Economist Paul A. Samuelson has written that most economists assert that conclusions reached by pure logical deduction are limited and weak.[18] According to economists Bryan Caplan and Paul A. Samuelson, this aspect of Austrian School methodology has led it to be widely dismissed within mainstream economics.[19]

Various Austrians have incorporated models and mathematics into their analysis of the economy. Austrian economist Steven Horwitz argues that Austrian methodology is consistent with macroeconomics and that Austrian macroeconomics can be expressed in terms of microeconomic foundations.[20] Austrian economist Roger Garrison argues that Austrian macroeconomic theory can be correctly expressed in terms of diagrammatic models.[21] In 1944, Austrian economist Oskar Morgenstern presented a rigorous schematization of an ordinal utility function (the Von Neumann–Morgenstern utility theorem) in Theory of Games and Economic Behavior.[22]

Theories

Opportunity cost

Friedrich von Wieser
Main article: Opportunity cost

The opportunity cost doctrine was first explicitly formulated by the Austrian economist Friedrich von Wieser in the late 19th century.[23] Opportunity cost is the cost of any activity measured in terms of the value of the next best alternative foregone (that is not chosen). It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices.[24] This view is currently held by contemporary economists of all mainstream schools of thought.

Opportunity cost is a key concept in economics, and has been described as expressing "the basic relationship between scarcity and choice".[25] The notion of opportunity cost plays a crucial part in ensuring that scarce resources are used efficiently.[26] Thus, opportunity costs are not restricted to monetary or financial costs: the real cost of output foregone, lost time, pleasure or any other benefit that provides utility should also be considered opportunity costs.

Capital and interest

See also: Capital and Interest, Marginalism, Neutrality of money, Say's law, and Time preference
Eugen von Böhm-Bawerk

The Austrian theory of capital and interest was first developed by Eugen von Böhm-Bawerk. He stated that interest rates and profits are determined by two factors, namely, supply and demand in the market for final goods and time preference.[27][28]

Böhm-Bawerk's theory was a response to Marx's labor theory of value and capital. Böhm-Bawerk's theory attacked the viability of the labor theory of value in the light of the transformation problem. He argued that capitalists do not exploit workers; they accommodate workers by providing them with income well in advance of the revenue from the output they helped to produce. Böhm-Bawerk's theory equates capital intensity with the degree of roundaboutness of production processes. Böhm-Bawerk also argued that the law of marginal utility necessarily implies the classical law of costs.[27] Some Austrian economists therefore entirely reject the notion that interest rates are affected by liquidity preference.[citation needed]

Inflation

See also: Monetary Inflation

Mises believed that money prices and wages will inevitably rise when the quantity of money and bank credit is increased,[29] commonly known as Quantity theory of money first noted by Copernicus[30]. He therefore used the term "inflation" to mean an excessive increase of the money supply and not, as is the common usage, to refer to price inflation. In Mises' view, inflation is the result of policies of the government or central bank which result in an increase in the circulating money supply.[31] Following Mises, the modern-day Austrian School argues that this semantic distinction is critical to public discussion of price inflation, and that price inflation can only be prevented by strict control of the money supply. Mises wrote:

In theoretical investigation there is only one meaning that can rationally be attached to the expression Inflation: an increase in the quantity of money (in the broader sense of the term, so as to include fiduciary media as well), that is not offset by a corresponding increase in the need for money (again in the broader sense of the term), so that a fall in the objective exchange-value of money must occur.[32]

Economist Richard Timberlake criticised von Mises' view that inflation must refer to an increase in the money supply. Timberlake noted that economists since the time of John Stuart Mill have recognized the distinction between increases in the money stock and increases in the general level of money prices. Timberlake stated that Mises' view has repeatedly been proven false and that statistical measurement of the aggregate price level is necessary in order test the empirical validity of Mises' theory.[33] Economist Paul Krugman has argued against Austrian views on inflation. Krugman points out that in the period from 2007 to late 2012, the monetary base increased by more than 350% with concomitant price inflation of less than 3% per year. According to Krugman, "If you believe that... expanding credit will simply result in too much money chasing too few goods, and hence a lot of inflation... the failure of high inflation to materialize amounts to a decisive rejection of that [Austrian] model".[34]

Economic calculation problem

Main article: Economic calculation problem
Friedrich Hayek

The economic calculation problem is a criticism of socialist economics. It was first proposed by Max Weber in 1920. This led to Mises discussing Weber's idea with his student Friedrich Hayek, who expanded upon it to such an extent that it became a key reason cited for the awarding of his Nobel prize.[35][36] The problem referred to is that of how to distribute resources effectively in an economy.

On the economic calculation problem

Austrian theory emphasizes the organizing power of the price mechanism. Mises and Hayek argued that the price mechanism is the only viable solution to the economic calculation problem, as the price mechanism co-ordinates supply and investment decisions most efficiently. Without the information efficiently and effectively provided by market prices, socialism lacks a method to efficiently allocate resources over an extended period of time in any market where the price mechanism is effective (an example where the price mechanism may not work is in the relatively confined area of public and common goods). Those who agree with this criticism argue it is a refutation of socialism and that it shows that a socialist planned economy could never work in the long term for the vast bulk of the economy and has very limited potential application. The debate raged in the 1920s and 1930s, and that specific period of the debate has come to be known by historians of economic thought as The Socialist Calculation Debate.[37]

Mises argued in a 1920 article "Economic Calculation in the Socialist Commonwealth" that the pricing systems in socialist economies were necessarily deficient because if government owned the means of production, then no prices could be obtained for capital goods as they were merely internal transfers of goods in a socialist system and not "objects of exchange," unlike final goods. Therefore, they were unpriced and hence the system would be necessarily inefficient since the central planners would not know how to allocate the available resources efficiently.[37] This led him to declare "…that rational economic activity is impossible in a socialist commonwealth."[38] Mises's declaration has been criticized as overstating the strength of his case, in describing socialism as impossible, rather than having to contend with a source of inefficiency.[10][39]

Business cycles

Main article: Austrian business cycle theory

The Austrian theory of the business cycle ("ABCT") focuses on the credit cycle as the cause of business cycles. Although later elaborated by Hayek and others, the theory was first set forth by von Mises, who believed that an expansion of the money supply, with artificially low interest rates, will lead to misallocation of capital (called malinvestment) by businesses. Austrian economist Murray Rothbard, wrote that "Mises’ theory shows the complete workings of the boom-bust cycle: the inflationary injection of bank credit, fostered by government; a boom marked by malinvestments caused by inflation’s tampering with the signals of the free market; the end of inflation revealing these unfortunate malinvestments; and finally, the depression as the correction by the free market of the wastes and distortions of the boom." Rothbard also said that Mises' theory is one of the few that integrates macro- with micro- economics, thereby supporting other Austrian theories regarding price coordination and capital structure.[40][41]

Most research regarding the theory finds that it is inconsistent with empirical evidence. Economists such as Gordon Tullock,[42] Bryan Caplan,[43] Milton Friedman,[44][45] and Paul Krugman[46] have said that they regard the theory as incorrect. In 1969, Friedman argued that the theory is not consistent with empirical evidence[47] and using newer data in 1993 reached the same conclusion.[48] However, in 2001, economist James P. Keeler argued that the theory is consistent with empirical evidence,[49] and, in 2006, economist Robert Mulligan also argued that the theory is consistent with empirical evidence.[50]

Assertions

According to the theory, a boom-bust cycle of malinvestment is generated by excessive and unsustainable credit expansion to businesses and individual borrowers by banks.[51] This credit creation makes it appear as if the supply of "saved funds" ready for investment has increased: the supply of funds for investment purposes increases, and the interest rate declines.[52] Borrowers take their newly acquired funds and bid up the prices of capital and other producers' goods, thereby stimulating a shift of investment from consumer goods to capital goods industries. Austrians contend that this shift is unsustainable and must reverse itself in due course, and that the re-adjustment process will be more violent and disruptive the longer the shift in capital goods industries continues.

The proportion of consumption to saving or investment is determined by people's time preferences, which is the degree to which they prefer present to future satisfactions. Thus, the pure interest rate is determined by the time preferences of the individuals in society, and the final market rates of interest reflect the pure interest rate plus or minus the entrepreneurial risk and purchasing power components.[53] Therefore, if the market rate of interest is set lower than this, entrepreneurs will over-invest.

Because they are all competing for the same pool of capital and market share, some entrepreneurs accelerate their borrowing, lest they be beaten to it by other entrepreneurs. A tendency toward over-investment and speculative borrowing in this environment is therefore almost inevitable.[51] This new money then circulates from the business borrowers to the factors of production: to the landowners and capital owners who sold assets to the newly indebted entrepreneurs, and then to the other factors of production in wages, rent, and interest. Austrians conclude that, since time preferences have not changed, people will rush to reestablish the old proportions, and demand will shift back from the higher to the lower orders. In other words, depositors will tend to remove cash from the banking system and spend it (not save it), banks will then ask their borrowers for payment and interest rates and credit conditions will deteriorate.[51]

Austrian business cycle theory does not argue that fiscal restraint or "austerity" will necessarily affect economic growth.[54] Rather, it argues that attempts by central governments to support asset prices, advance funding to insolvent banks, or stimulate the economy with deficit spending will only make the misallocations and malinvestments worse, further distorting the market's pricing information and resource allocation. ABCT therefore asserts that such government policy will prolong the adjustment necessary to return to stable growth.[54] Austrians argue the policy error rests in the government's (and central bank's) weakness or negligence in allowing the "false" credit-fueled boom to begin in the first place, not in having it end with financial crisis or fiscal and monetary "austerity".

The role of central banks

Austrians generally argue that inherently damaging and ineffective central bank policies, including unsustainable expansion of bank credit through fractional reserve banking, are the predominant cause of most business cycles, as they tend to set artificial interest rates too low for too long, resulting in excessive credit creation, speculative "bubbles", and artificially low savings.[55] Under fiat monetary systems, a central bank creates new money when it lends to member banks, and this money is multiplied many times over through the money creation process of the private banks. This new bank-created money enters the loan market and provides a lower rate of interest than that which would prevail if the money supply were stable.[51][52]

Murray Rothbard argues central banks played a large role in creating an environment of loose credit prior to the onset of the Great Depression, as well as the subsequent ineffectiveness of central bank policies, which he argues delayed necessary price adjustments and prolonged market dysfunction.[54] Rothbard begins with the premise that in a market with no centralized monetary authority, there would be no simultaneous cluster of malinvestments or entrepreneurial errors, since astute entrepreneurs would not all make errors at the same time and would quickly take advantage of any temporary, isolated mispricing. In addition, in an open, non-centralized (uninsured) capital market, astute bankers would shy away from speculative lending and uninsured depositors would carefully monitor the balance sheets of risky financial institutions, tempering any speculative excesses that arose sporadically in the finance markets. In Rothbard's view, the cycle of generalized malinvestment is greatly exacerbated by centralized monetary intervention in the money markets by the central bank.

Rothbard argues that an over-encouragement to borrow and lend is initiated by the mispricing of credit via the central bank's centralized control over interest rates and its need to protect banks from periodic bank runs (which Austrians believe then causes interest rates to be set too low for too long when compared to the rates that would prevail in a genuine non-central bank dominated free market).[51][56]

Etymology

The School owes its name to members of the German Historical school of economics, who argued against the Austrians during the Methodenstreit ("methodology struggle"), in which the Austrians defended the reliance that classical economists placed upon deductive logic. In 1883, Menger published Investigations into the Method of the Social Sciences with Special Reference to Economics, which attacked the methods of the Historical school. Gustav von Schmoller, a leader of the Historical school, responded with an unfavorable review, coining the term "Austrian School" in an attempt to characterize the school as outcast and provincial.[57] The label remained and was adopted by the adherents themselves.

History

Jean-Baptiste Say

First Wave

File:CarlMenger.png
Carl Menger

The school originated in Vienna, in the Austrian Empire. Carl Menger's 1871 book, Principles of Economics, is generally considered the founding of the Austrian School. The book was one of the first modern treatises to advance the theory of marginal utility. The Austrian School was one of three founding currents of the marginalist revolution of the 1870s, with its major contribution being the introduction of the subjectivist approach in economics.[58][page needed] While marginalism was generally influential, there was also a more specific school that began to coalesce around Menger's work, which came to be known as the “Psychological School,” “Vienna School,” or “Austrian School.”[59] Thorstein Veblen introduced the term neoclassical economics in his Preconceptions of Economic Science (1900) to distinguish marginalists in the objective cost tradition of Alfred Marshall from those in the subjective valuation tradition of the Austrian School.[60][61][not specific enough to verify]

Carl Menger contributions to economic theory were closely followed by that of Böhm-Bawerk and Friedrich von Wieser. These three economists became what is known as the "first wave" of the Austrian School. Böhm-Bawerk wrote extensive critiques of Karl Marx in the 1880s and 1890s, as was part of the Austrians' participation in the late 19th Century Methodenstreit, during which they attacked the Hegelian doctrines of the Historical School.

Twentieth century

Israel Kirzner

By the mid-1930s, most economists had embraced what they considered the important contributions of the early Austrians.[8] After World War II, Austrian economics was disregarded or derided by most economists because it rejected mathematical and statistical methods in the study of economics.[62]

Austrian economics after 1940 can be divided into two schools of economic thought, and the school "split" to some degree in the late 20th century. One camp of Austrians, exemplified by Mises, regards neoclassical methodology to be irredeemably flawed; the other camp, exemplified by Friedrich Hayek, accepts a large part of neoclassical methodology and is more accepting of government intervention in the economy.[10][63]

Influenced by Mises, Henry Hazlitt wrote economics columns and editorials for a number of publications and penned many books on the topic of Austrian economics from the 1930s to the 1980s, notably in a clear and accessible writing style.[64] While he is perhaps best recognized for his book Economics in One Lesson (1946), which sold over a million copies, he is also known for The Failure of the "New Economics" (1959), a line-by-line critique of John Maynard Keynes's General Theory.[65]

The reputation of the Austrian School rose in the late-20th century due in part to the work of Israel Kirzner and Ludwig Lachmann, and renewed interest in the work of Hayek after he won the Nobel Memorial Prize in Economic Sciences.[12] Hayek's work was influential in the revival of laissez-faire thought in the 20th century.[66][67]

In the late twentieth century Murray Rothbard became prominent, largely for his work in political theory and examination of economic issues from an anarchist point of view. Rothbard was associated with the Cato Institute and later with the Ludwig von Mises Institute where he was Academic Vice-President until his death in 1995. Rothbard's anarchist views have been promoted and expanded by various other writers associated with the Mises Institute.[68] Rothbard opposed fractional reserve banking, viewing it as a fraudulent contract that should be criminalized as a sub-category of embezzlement.[69][70][71] [72] He advocated the abolition of central banks and fractional-reserve banking, advocating either a 100% reserve gold standard or that each individual should choose what to accept as money, a system called free banking, which he believed would provide a market mechanism to limit credit creation.[69]

Twenty-first century

Several Austrian economists have made contributions to Austrian economics in the twenty-first century, including noted Spanish economist Jesús Huerta de Soto, Anthony Carilli,[73] Gregory Dempster,[73] Roger Garrison,[74] Steven Horwitz,[20] and Robert Murphy.[75] Garrison has contributed to Austrian macroeconomics. Carlilli, Dempster, Garrison, de Soto and Murphy have contributed to the Austrian business cycle theory.

Influence

Many theories developed by "first wave" Austrian economists have been absorbed into most mainstream schools of economics. These include Carl Menger's theories on marginal utility, Friedrich von Wieser's theories on opportunity cost, and Eugen von Böhm-Bawerk's theories on time preference, as well as Menger and Böhm-Bawerk's criticisms of Marxian economics.

The former U.S. Federal Reserve Chairman, Alan Greenspan, speaking of the originators of the School, said in 2000, "the Austrian School have reached far into the future from when most of them practiced and have had a profound and, in my judgment, probably an irreversible effect on how most mainstream economists think in this country."[76] In 1987, Nobel Laureate James M. Buchanan told an interviewer, "I have no objections to being called an Austrian. Hayek and Mises might consider me an Austrian but, surely some of the others would not."[77] Republican U.S. congressman Ron Paul states that he adheres to Austrian School economics and has authored six books which refer to the subject.[78][79] Paul's former economic adviser, investment dealer Peter Schiff,[80] also calls himself an adherent of the Austrian School.[81] Jim Rogers, investor and financial commentator, also considers himself of the Austrian School of economics.[82] Chinese economist Zhang Weiying, who is known in China for his advocacy of free market reforms, supports some Austrian theories such as the Austrian theory of the business cycle.[83] Currently, universities with a significant Austrian presence are George Mason University, Loyola University New Orleans, and Auburn University in the United States and Universidad Francisco Marroquín in Guatemala. Austrian economic ideas are also promoted by bodies such as the Mises Institute and the Foundation for Economic Education.

Criticisms

General criticisms

Some economists have argued that Austrians are often averse to the use of mathematics and statistics in economics.[84]

Economist Bryan Caplan argues that Austrians have not to appreciated many of the valid contributions of mainstream economics and have often misunderstood modern economics, causing them to overstate their differences with it. For example, many Austrians object to the use of cardinal utility in microeconomic theory; however, microeconomic theorists go to great pains to show that their results hold for all strictly monotonic transformations of utility, and so are true for purely ordinal preferences.[85][86] The result is that conclusions about utility preferences hold no matter what values are assigned to them.

Economist Paul Krugman has stated that because Austrians do not use "explicit models" they are unaware of holes in their own thinking.[87]

Economist Benjamin Klein has criticized the economic methodological work of Austrian economist Israel M. Kirzner. While praising Kirzner for highlighting shortcomings in traditional methodology, Klein argued that Kirzner did not provide a viable alternative for economic methodology.[88] Economist Tyler Cowen has written that Kirzner's theory of entrepreneurship can ultimately be reduced to a neoclassical search model and is thus not uin the radical subjectivist tradition of Austrian praxeology. Cowen states that Kirzner's entrepreneurs can be modeled in mainstream terms of search.[89]

Economist Jeffrey Sachs argues that among developed countries, those with high rates of taxation and high social welfare spending perform better on most measures of economic performance compared to countries with low rates of taxation and low social outlays. He concludes that Friedrich Hayek was wrong to argue that high levels of government spending harms an economy, and "a generous social-welfare state is not a road to serfdom but rather to fairness, economic equality and international competitiveness."[90] Austrian economist Sudha Shenoy responded by arguing that countries with large public sectors have grown more slowly.[91]

Methodology

Critics generally argue that Austrian economics lacks scientific rigor and rejects scientific methods and the use of empirical data in modelling economic behavior.[10][84][92] Some economists describe Austrian methodology as being a priori or non-empirical.[10][19][84][93]

Economist Mark Blaug has criticized over-reliance on methodological individualism, arguing it would rule out all macroeconomic propositions that cannot be reduced to microeconomic ones, and hence reject almost the whole of received macroeconomics.[94]

Economist Thomas Mayer has stated that Austrians advocate a rejection of the scientific method which involves the development of empirically falsifiable theories.[92][93] Furthermore, many supporters of using models of market behavior to analyze and test economic theory argue that economists have developed numerous experiments that elicit useful information about individual preferences.[95][96]

Capital and interest

Many social anarchists object to the theory of time preference being applied to an economy as a whole in a capitalist society. They argue that the theory fails to take into account that making profits in a capitalist society is not the provision of future means of consumption, but rather profits for their own sake.[97]

Business cycle theory

Main article: Austrian business cycle theory § Criticisms

According to John Quiggin, most economists believe that the Austrian business cycle theory is incorrect because of its incompleteness and other problems.[98][further explanation needed]

Theoretical objections

Some economists argue that Austrian business cycle theory requires bankers and investors to exhibit a kind of irrationality, because the Austrian theory posits that investors will be fooled repeatedly (by temporarily low interest rates) into making unprofitable investment decisions.[10][42][99] Bryan Caplan writes: "Why does Rothbard think businessmen are so incompetent at forecasting government policy? He credits them with entrepreneurial foresight about all market-generated conditions, but curiously finds them unable to forecast government policy, or even to avoid falling prey to simple accounting illusions generated by inflation and deflation... Particularly in interventionist economies, it would seem that natural selection would weed out businesspeople with such a gigantic blind spot."[100] Austrian economist Robert Murphy argues that it is difficult for investors to make sound business choices because they cannot know what the interest rate would be if it were set by the market.[75]

Economist Paul Krugman has argued that the theory cannot explain changes in unemployment over the business cycle. Austrian business cycle theory postulates that business cycles are caused by the misallocation of resources from consumption to investment during "booms", and out of investment during "busts". Krugman argues that because total spending is equal to total income in an economy, the theory implies that the reallocation of resources during "busts" would increase employment in consumption industries, whereas in reality, spending declines in all sectors of an economy during recessions. He also argues that according to the theory the initial "booms" would also cause resource reallocation, which implies an increase in unemployment during booms as well.[46] In response, Austrian economist David Gordon argues that Krugman's argument is dependent on a misrepresentation of the theory. He furthermore argues that prices on consumption goods may go up as a result of the investment bust, which could mean that the amount spent on consumption could increase even though the quantity of goods consumed has not.[101] Furthermore, Roger Garrison argues that a false boom caused by artificially low interest rates would cause a boom in consumption goods as well as investment goods (with a decrease in "middle goods"), thus explaining the jump in unemployment at the end of a boom.[102] Many Austrians also argue that capital allocated to investment goods cannot be quickly augmented to create consumption goods.[103]

Economist Jeffery Hummel is critical of Hayek's explanation of labor asymmetry in booms and busts. He argues that Hayek makes peculiar assumptions about demand curves for labor in his explanation of how a decrease in investment spending creates unemployment. He also argues that the labor asymmetry can be explained in terms of a change in real wages, but this explanation fails to explain the business cycle in terms of resource allocation.[104]

Milton Friedman objected to the policy implications of the theory, stating the following in a 1998 interview:

I think the Austrian business-cycle theory has done the world a great deal of harm. If you go back to the 1930s, which is a key point, here you had the Austrians sitting in London, Hayek and Lionel Robbins, and saying you just have to let the bottom drop out of the world. You’ve just got to let it cure itself. You can’t do anything about it. You will only make it worse. You have Rothbard saying it was a great mistake not to let the whole banking system collapse. I think by encouraging that kind of do-nothing policy both in Britain and in the United States, they did harm.[105]

Empirical objections

Hummel argues that the Austrian explanation of the business cycle fails on empirical grounds. In particular, he notes that investment spending remained positive in all recessions where there are data, except for the Great Depression. He argues that this casts doubt on the notion that recessions are caused by a reallocation of resources from industrial production to consumption, since he argues that the Austrian business cycle theory implies that net investment should be below zero during recessions.[104] In response, Austrian economist Walter Block argues that the misallocation during booms does not preclude the possibility of demand increasing overall.[106]

In 1969, economist Milton Friedman, after examining the history of business cycles in the U.S., concluded that "The Hayek-Mises explanation of the business cycle is contradicted by the evidence. It is, I believe, false."[44] He analyzed the issue using newer data in 1993, and again reached the same conclusion.[45]

Referring to Friedman's discussion of the business cycle, Austrian economist Roger Garrison stated, "Friedman's empirical findings are broadly consistent with both Monetarist and Austrian views", and goes on to argue that although Friedman's model "describes the economy's performance at the highest level of aggregation; Austrian theory offers an insightful account of the market process that might underlie those aggregates."[107][108]

Principal works

See also

References and notes

  1. ^ Carl Menger, Prinicples of Economics, online at http://www.mises.org/etexts/menger/principles.asp
  2. ^ Austrian School of Economics: The Concise Encyclopedia of Economics | Library of Economics and Liberty
  3. ^ Methodological Individualism at the Stanford Encyclopedia of Philosophy
  4. ^ Ludwig von Mises. Human Action, p. 11, "r. Purposeful Action and Animal Reaction". Referenced 2011-11-23.
  5. ^ Joseph A. Schumpeter, History of economic analysis, Oxford University Press 1996, ISBN 978-0195105599.
  6. ^ Birner, Jack; van Zijp, Rudy (1994). Hayek, Co-ordination and Evolution: His Legacy in Philosophy, Politics, Economics and the History of Ideas. London, New York: Routledge. p. 94. ISBN 978-0-415-09397-2. {{cite book}}: Unknown parameter |month= ignored (help)
  7. ^ Boettke, Peter. "Is Austrian Economics Heterodox Economics?". The Austrian Economists. Archived from the original on 28 March 2009. Retrieved 2009-02-13. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  8. ^ a b Boettke, Peter J. (2003). "28A: The Austrian School of Economics 1950-2000". In Warren Samuels, Jeff E. Biddle, and John B. Davis (ed.). A Companion to the History of Economic Thought. Blackwell Publishing. pp. 446–452. ISBN 978-0-631-22573-7. {{cite book}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)CS1 maint: multiple names: editors list (link)
  9. ^ "Heterodox economics: Marginal revolutionaries". The Economist. December 31, 2011. Retrieved February 22, 2012.
  10. ^ a b c d e f Caplan, Bryan. "Why I Am Not an Austrian Economist". George Mason University. Retrieved 2008-07-04. More than anything else, what prevents Austrians from getting more publications in mainstream journals is that their papers rarely use mathematics or econometrics, research tools that Austrians reject on principle...Mises and Rothbard however err when they say that economic history can only illustrate economic theory. In particular, empirical evidence is often necessary to determine whether a theoretical factor is quantitatively significant...Austrians reject econometrics on principle because economic theory is true a priori, so statistics or historical study cannot "test" theory.
  11. ^ Austrian Economics and the Mainstream: View from the Boundary, Roger E. Backhouse
  12. ^ a b Meijer, G. (1995). New Perspectives on Austrian Economics. New York: Routledge. ISBN 978-0-415-12283-2.
  13. ^ Ludwig von Mises, Nationalökonomie (Geneva: Union, 1940), p. 3; Human Action (Auburn, Ala.: Mises Institute, [1949] 1998), p. 3.
  14. ^ Bruce J. Caldwell "Praxeology and its Critics: an Appraisal" History of Political Economy Fall 1984 16(3): 363-379; doi:10.1215/00182702-16-3-363 [1]
  15. ^ Richard N. Langlois, "FROM THE KNOWLEDGE OF ECONOMICS TO THE ECONOMICS OF KNOWLEDGE: FRITZ MACHLUP ON METHODOLOGY AND ON THE "KNOWLEDGE SOCIETY" Research in the History of Economic Thought and Methodology, Volume 3, pages 225-235 [2]
  16. ^ "The Ultimate Foundation of Economic Science by Ludwig von Mises". Mises.org. Retrieved 2012-08-13.
  17. ^ The Austrian Search for Realistic Foundations, Bryan Caplan
  18. ^ Samuelson, Paul (1964). Economics (6th ed.). New York: McGraw-Hill. p. 736. ISBN 978-0-07-074741-8.
  19. ^ a b Samuelson, Paul A. (1964). "Theory and Realism: A Reply". The American Economic Review. American Economic Association: 736–739. Well, in connection with the exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning ..... – I tremble for the reputation of my subject. Fortunately, we have left that behind us. {{cite journal}}: Invalid |ref=harv (help); Unknown parameter |month= ignored (help)
  20. ^ a b Horwitz, Steven: Microfoundations and Macroeconomics: An Austrian Perspective (2000)|Routledge
  21. ^ http://library.mises.org/books/Roger%20W%20Garrison/Austrian%20Macroeconomics%20A%20Diagrammatical%20Exposition.pdf Garrison, Roger: Austrian Macroeconomics: A Diagrammatical Exposition (1978)|Institute for Humane Studies
  22. ^ Neumann, John von and Morgenstern, Oskar Theory of Games and Economic Behavior. Princeton, NJ. Princeton University Press. 1944
  23. ^ Kirzner, Israel M.; Lachman, Ludwig M. (1986). Subjectivism, intelligibility and economic understanding: essays in honor of Ludwig M. Lachmann on his eightieth birthday (Illustrated ed.). McMillan. ISBN 978-0-333-41788-1.
  24. ^ "Opportunity Cost". Investopedia. Archived from the original on 14 September 2010. Retrieved 2010-09-18. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  25. ^ James M. Buchanan (2008). "Opportunity cost". The New Palgrave Dictionary of Economics Online (Second ed.). Retrieved 2010-09-18. {{cite encyclopedia}}: Invalid |ref=harv (help)
  26. ^ "Opportunity Cost". Economics A-Z. The Economist. Archived from the original on 9 October 2010. Retrieved 2010-09-18. {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  27. ^ a b Böhm-Bawerk, Eugen Ritter von; Kapital Und Kapitalizns. Zweite Abteilung: Positive Theorie des Kapitales (1889). Translated as Capital and Interest. II: Positive Theory of Capital with appendices rendered as Further Essays on Capital and Interest.
  28. ^ http://www.econlib.org/library/Enc/bios/BohmBawerk.html
  29. ^ von Mises, Ludwig (1980). "Economic Freedom and Interventionism". In Greaves, Bettina B. (ed.). Economics of Mobilization. Sulphur Springs, West Virginia: The Commercial and Financial Chronicle. Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term "inflation" to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. . . . As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil. They try to keep prices low while firmly committed to a policy of increasing the quantity of money that must necessarily make them soar. As long as this terminological confusion is not entirely wiped out, there cannot be any question of stopping inflation. {{cite book}}: External link in |chapterurl= (help); Invalid |ref=harv (help); Unknown parameter |chapterurl= ignored (|chapter-url= suggested) (help)
  30. ^ Nicolaus Copernicus (1517), memorandum on monetary policy.
  31. ^ Ludwig von Mises, The Theory of Money and Credit", ISBN 978-0-913966-70-9
  32. ^ The Theory of Money and Credit, Mises (1912, [1981], p. 272)
  33. ^ Timberlake, Richard H. (September 1, 2000). "Austrian Inflation, Austrian Money, and Federal Reserve Policy". The Freeman. Retrieved 31 January 2013.
  34. ^ Paul Krugman, Varieties of Error http://krugman.blogs.nytimes.com/2012/11/29/varieties-of-error/
  35. ^ Von Mises, Ludwig (1990). Economic calculation in the Socialist Commonwealth (PDF). Ludwig von Mises Institute. ISBN 0-945466-07-2. Archived from the original (PDF) on 23 September 2008. Retrieved 2008-09-08. {{cite book}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  36. ^ F. A. Hayek, (1935), "The Nature and History of the Problem" and "The Present State of the Debate," om in F. A. Hayek, ed. Collectivist Economic Planning, pp. 1–40, 201–243.
  37. ^ a b The socialist calculation debate[dead link]
  38. ^ Ludwig von Mises. "The Principle of Methodological Individualism". Human Action. Ludwig von Mises Institute. Archived from the original on 22 April 2009. Retrieved 2009-04-24. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  39. ^ Caplan, Bryan (2004). "Is socialism really "impossible"?". Critical Review. 16: 33–52. doi:10.1080/08913810408443598. {{cite journal}}: Invalid |ref=harv (help)
  40. ^ Why QE3 Will Fail, Mises.org
  41. ^ Rothbard, Murray. "eview of Wesley C. Mitchell, Business Cycles and Their Causes". The Freeman, 9, 12, December 1959, pp. 52–54. Retrieved 10 January 2013.
  42. ^ a b Gordon Tullock (1988). "Why the Austrians are wrong about depressions" (PDF). The Review of Austrian Economics. 2 (1): 73–78. doi:10.1007/BF01539299. Retrieved 2009-06-24. {{cite journal}}: Invalid |ref=harv (help)
  43. ^ Caplan, Bryan (2008-01-02). "What's Wrong With Austrian Business Cycle Theory". Library of Economics and Liberty. Retrieved 2008-07-28.
  44. ^ a b Friedman, Milton. "The Monetary Studies of the National Bureau, 44th Annual Report". The Optimal Quantity of Money and Other Essays. Chicago: Aldine. pp. 261–284.
  45. ^ a b Friedman, Milton. "The 'Plucking Model' of Business Fluctuations Revisited". Economic Inquiry: 171–177. {{cite journal}}: Invalid |ref=harv (help)
  46. ^ a b Krugman, Paul (1998-12-04). "The Hangover Theory". Slate. Archived from the original on 2010-11-07. Retrieved 2008-06-20. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  47. ^ Friedman, Milton. "The Monetary Studies of the National Bureau, 44th Annual Report". The Optimal Quantity of Money and Other Essays. Chicago: Aldine. pp. 261–284.
  48. ^ Friedman, Milton. "The 'Plucking Model' of Business Fluctuations Revisited". Economic Inquiry: 171–177.
  49. ^ Keeler, JP. (2001). "Empirical Evidence on the Austrian Business Cycle Theory". Review of Austrian Economics. 14 (4): 331–351. doi:10.1023/A:1011937230775. {{cite journal}}: Invalid |ref=harv (help)
  50. ^ An Empirical Examination of Austrian Business Cycle Theory
  51. ^ a b c d e Theory of Money and Credit, Ludwig von Mises, Part III, Part IV
  52. ^ a b The Mystery of Banking, Murray Rothbard, 1983
  53. ^ Theory of Money and Credit, Ludwig von Mises, Part II
  54. ^ a b c America's Great Depression, Murray Rothbard
  55. ^ Thorsten Polleit, Manipulating the Interest Rate: a Recipe for Disaster, 13 December 2007
  56. ^ Manipulating the Interest Rate: a Recipe for Disaster, Thorsten Polleit, 13 December 2007
  57. ^ "Menger’s approach – haughtily dismissed by the leader of the German Historical School, Gustav Schmoller, as merely “Austrian,” the origin of that label – led to a renaissance of theoretical economics in Europe and, later, in the United States." Peter G. Klein, 2007; in the Foreword to Principles of Economics, Carl Menger; trns. James Dingwall and Bert F. Hoselitz, 1976; Ludwig von Mises Institute, Alabama; 2007; ISBN 978-1-933550-12-1
  58. ^ Keizer, Willem (1997). Austrian Economics in Debate. New York: Routledge. ISBN 978-0-415-14054-6.
  59. ^ Israel M. Kirzner (1987). "Austrian School of Economics," The New Palgrave: A Dictionary of Economics, v. 1, pp. 145–151.
  60. ^ Veblen, Thorstein Bunde; “The Preconceptions of Economic Science” Pt III, Quarterly Journal of Economics v14 (1900).
  61. ^ Colander, David; The Death of Neoclassical Economics.
  62. ^ "Austrian economics and the mainstream: View from the boundary" by Roger E. Backhouse, $34 to view [dead link]
  63. ^ http://mises.org/journals/qjae/pdf/qjae7_1_3.pdf
  64. ^ "Remembering Henry Hazlitt". The Freeman. Retrieved 2013-03-11.
  65. ^ "Biography of Henry Hazlitt". The Ludwig von Mises Institute. Retrieved 2013-03-11.
  66. ^ Raico, Ralph (2011). "Austrian Economics and Classical Liberalism". mises.org. Mises Institute. Retrieved 27 July 2011. despite the particular policy views of its founders ..., Austrianism was perceived as the economics of the free market
  67. ^ Kasper, Sherryl Davis (2002). The Revival of Laissez-faire in American Macroeconomic Theory. Edward Elgar Publishing. p. 66. ISBN 978-1-84064-606-1.
  68. ^ Rothbard, Murray (1991). Betrayal of the American Right (PDF). Mises Institute. p. 74.
  69. ^ a b Rothbard, Murray. The Mystery of Banking, p. 261
  70. ^ Krugman's MMMF Question
  71. ^ See also these Rothbard articles: What Has Government Done to Our Money?, The Case for the 100% Gold Dollar; The Fed as Cartel, Private Coinage, Repudiate the National Debt; Taking Money Back, Anatomy of the Bank Run, Money and the Individual
  72. ^ See the online collection of Murray Rothbard's writings here
  73. ^ a b The Review of Austrian Economics, 2008, vol. 21, issue 4, pages 271-281
  74. ^ Auburn User. "Overconsumption And Forced Saving". Auburn.edu. Retrieved 2012-08-13. {{cite web}}: |author= has generic name (help)
  75. ^ a b Robert P. Murphy. "Correcting Quiggin on Austrian Business-Cycle Theory - Robert P. Murphy - Mises Daily". Mises.org. Retrieved 2012-08-13.
  76. ^ Greenspan, Alan. "Hearings before the U.S. House of Representatives' Committee on Financial Services." U.S. House of Representatives' Committee on Financial Services. Washington D.C.. 25 July 2000.
  77. ^ An Interview with Laureate James Buchanan Austrian Economics Newsletter: Volume 9, Number 1; Fall 1987
  78. ^ The Economics of a Free Society - Ron Paul - Mises Institute
  79. ^ Paul, Ron (2008). The Revolution: A Manifesto. Grand Central Publishing. p. 102. ISBN 978-0-446-53751-3.
  80. ^ "Peter Schiff Named Economic Advisor to the Ron Paul 2008 Presidential Campaign". Reuters. 2008-01-25.
  81. ^ Interview with Peter Schiff
  82. ^ Inside the House of Money: Top Hedge Fund Traders on Profiting in the Global Markets. 2006. Wiley. p. 230
  83. ^ Weiyin, Zhang, "Completely bury Keynesianism", http://finance.sina.com.cn/20090217/10345864499_3.shtml (February 17, 2009)
  84. ^ a b c White, Lawrence H. (2008). "The research program of Austrian economics". Advances in Austrian Economics. Emerald Group Publishing Limited: 20. {{cite journal}}: Invalid |ref=harv (help) Cite error: The named reference "white1" was defined multiple times with different content (see the help page).
  85. ^ Caplan, Bryan. "Why I Am Not an Austrian Economist". George Mason University. Retrieved 2008-07-04. According to Rothbard, the mainstream approach credulously accepted the use of cardinal utility, when only the use of ordinal utility is defensible. As Rothbard insists, "Value scales of each individual are purely ordinal, and there is no way whatever of measuring the distance between the rankings; indeed, any concept of such distance is a fallacious one." ...As plausible as Rothbard sounds on this issue, he simply does not understand the position he is attacking. The utility function approach is based as squarely on ordinal utility as Rothbard's is. The modern neoclassical theorists - such as Arrow and Debreau - who developed the utility function approach went out of their way to avoid the use of cardinal utility. ...To sum up, Rothbard falsely accused neoclassical utility theory of assuming cardinality. It does not.
  86. ^ Caplan, Bryan (1999). "The Austrian Search for Realistic Foundations". Southern Economic Journal. 65 (4). Southern Economic Association: 823–838. doi:10.2307/1061278. JSTOR 1061278. {{cite journal}}: Invalid |ref=harv (help); Unknown parameter |month= ignored (help)
  87. ^ Krugman, Paul (4-7-2010). "The Conscience of a Liberal: Martin And The Austrians". The New York Times. Retrieved 9-21-2011. {{cite web}}: Check date values in: |accessdate= and |date= (help); Italic or bold markup not allowed in: |publisher= (help)
  88. ^ Klein, Benjamin. "Book review: Competition and Entrepreneurship" (by Israel M. Kirzner, University of Chicago Press, 1973) Journal of Political Economy. Vol. 83: No. 6, 1305–1306, December 1975.
  89. ^ Cowen, Tyler. "Entrepreneurship, Austrian Economics, and the Quarrel Between Philosophy and Poetry". Review of Austrian Economics. 16 (1). {{cite journal}}: |access-date= requires |url= (help); Unknown parameter |month= ignored (help)
  90. ^ Sachs, Jeffrey (October 2006). "The Social Welfare State, Beyond Ideology". Scientific American. Retrieved 2008-06-20. {{cite journal}}: Invalid |ref=harv (help)
  91. ^ Sudha R. Shenoy, Are High Taxes the Basis of Freedom and Prosperity?, http://www.thefreemanonline.org/featured/are-high-taxes-the-basis-of-freedom-and-prosperity/
  92. ^ a b "Rules for the study of natural philosophy", Newton 1999, pp. 794–6, from Book 3, The System of the World.
  93. ^ a b Mayer, Thomas (1998). "Boettke's Austrian critique of mainstream economics: An empiricist's response". Critical Review. 12. Routledge: 151–171. doi:10.1080/08913819808443491. {{cite journal}}: Invalid |ref=harv (help); Unknown parameter |month= ignored (help)
  94. ^ Blaug, Mark (1992). The Methodology of Economics: Or, How Economists Explain. Cambridge University Press. pp. 45–46. ISBN 0-521-43678-8.
  95. ^ Morgan, Mary S. (2008). "Models". The New Palgrave Dictionary of Economics. Retrieved 22 November 2011.
  96. ^ Hoover, Kevin D. (2008). "Causality in economics and econometrics". The New Palgrave Dictionary of Economics. Retrieved 22 November 2011.
  97. ^ The Anarchist FAQ Editorial Collective, An Anarchist FAQ http://infoshop.org/page/AnarchistFAQSectionC2#secc26
  98. ^ "John Quiggin " Austrian Business Cycle Theory". johnquiggin.com. Retrieved 19 July 2010.
  99. ^ Problems with Austrian Business Cycle Theory
  100. ^ Caplan, Bryan (February 12, 2009). "What's Wrong With Austrian Business Cycle Theory" (news). Liberty Fund, Inc. Retrieved 2010-05-17.
  101. ^ Hangover Theory: How Paul Krugman Has Misconceived Austrian Theory - David Gordon - Mises Daily
  102. ^ Auburn User. "Overconsumption And Forced Saving". Auburn.edu. Retrieved 2012-08-15. {{cite web}}: |author= has generic name (help)
  103. ^ Roger W. Garrison. "Hayek on Industrial Fluctuations - Roger W. Garrison - Mises Daily". Mises.org. Retrieved 2012-08-13.
  104. ^ a b Hummel, Jeffery Rogers (Winter 1979). Reason Papers "Problems with Austrian Business Cycle Theory" (PDF). pp. 41–53. Retrieved 9-17-2011. {{cite web}}: Check |url= value (help); Check date values in: |accessdate= (help)
  105. ^ Interview in Barron's Magazine, August 24, 1998 archived at Hoover Institution [3]
  106. ^ http://www.reasonpapers.com/pdf/30/rp_30_4.pdf
  107. ^ Auburn User (1982-10-25). "Plucking Model". Auburn.edu. Retrieved 2012-08-13. {{cite web}}: |author= has generic name (help)
  108. ^ Milton Friedman, "The 'Plucking Model' of Business Fluctuations Revisited" Economic Inquiry April, 1993

Further reading

Wikimedia Commons has media related to Austrian School.

Template:Link GA

Retrieved from "https://en.wikipedia.org/w/index.php?title=Austrian_school_of_economics&oldid=549659726"