The Austrian School Of Economics In The 21st Century

This book provides an overview of the evolution and theories of the Austrian School of Economics and develops answers to current economic questions and the pressing problems of the 21st century from the Austrian perspective. Readers will learn about the fundamental ideas of the Austrian School, the current state of Austrian economics, and the intellectual figures and institutions that sustain it as a vibrant intellectual movement. International experts on Austrian economics cover topics such as the economic impact of pandemics, trade blocs, federalism and European integration, and the economic development of China. The book also discusses the influence of the Austrian School on modern economic thought and mainstream economics, as well as on policymakers. It will appeal to students and scholars of economics and to anyone interested in social and economic liberalism.

This book analyzes both the consistent and changing elements in the Austrian School of Economics since its foundation in the late 19th Century up to the recent offspring of this School. It investigates the dynamic metamorphosis of the school, mainly with reference to its contact with representatives of history of economic thought.

Presenting a concise overview of the post-war decline in popularity of the Austrian school of economics and its subsequent revival in the late twentieth century, this updated second edition offers a theoretical and historical introduction to the ideas of the Austrian school and its intellectually distinguishing qualities. This Advanced Introduction considers the field’s key originators and proponents and reflects on the acceleration in interest in the last two decades.

The financial crisis has exposed severe shortcomings in mainstream monetary economics and modern finance. It is surprising that these shortcomings have not led to a wider debate about the need to overhaul these theories. Instead, mainstream economists have closed ranks to defend existing theories and public authorities have expanded their interference in markets. This book investigates the problems associated with mainstream monetary economics and finance, and proposes alternatives based on the Austrian school of economics. This school emanated from the work of the nineteenth-century Austrian economist Carl Menger and was developed further by Eugen von Böhm-Bawerk, Ludwig von Mises, and Friedrich August von Hayek. In monetary economics, the Austrian school regards the creation of money by banks through credit extension as a key source of economic instability. From this follows the need for a comprehensive reform of our present monetary system. In a new monetary order, money could be issued by both public and private institutions, and there would be no need for fractional reserve banking. Instead of creating money, banks would intermediate it. In finance, the Austrian school rejects the notion of rational expectations and measurable risk. Individuals use their subjective knowledge to gather and evaluate information, and they act in a world of radical uncertainty. Hence, markets are not "efficient" nor can portfolios be built on the basis of known probability distributions of asset prices as described in the modern finance literature. This book explores the need for a new theoretical foundation for asset pricing and investment management that will give practitioners more useful orientation.

Several of the papers in Advances in Austrian Economics Volume 21 focus on the differences between the US and Canadian experiences during the early 21st century, while other contributors offer critical extensions of Austrian monetary and business cycle theory.

The Austrian School of Economics was founded by Carl Menger in Vienna during the last third of the nineteenth century. From that time until today, its vibrant teaching tradition has had a significant influence on the formation and further development of the modern social sciences and economics in Europe and the United States. Its research agenda was characterized by an astonishing multitude of diverse, and in some cases even contradictory, conclusions. All branches of the school shared the conviction that the subjective feelings and actions of the individual are those which drive economic activity. Based on this conviction, explanations for economic phenomena such as value, exchange, price, interest, and entrepreneurial profit were derived, and step by step expanded into a comprehensive theory of money and business cycles. Because of their subjectivist-individualistic approach, economists of the Austrian School regarded any kind of collective as unscientific in rationale. This led to fierce arguments with the Marxists, the German Historical School, and later with the promoters of planned economy and state interventionism. In the modern Austrian School of Economics, questions regarding knowledge, monetary theory, entrepreneurship, the market process, and spontaneous order placed themselves in the foreground. This book endeavors to trace the development of this multifaceted tradition, with all of its ideas, personalities, and institutions.