Austrianism

Question 1

What are the two schools of Austrian Economics?

Answer 1

1. Mises-Rothbard school: non-academic, inflammatory, anti-inflation
2. Hayekian school: academic, focused on economic balance

Question 2

What is Austrian economics interested in the relationship between?

Answer 2

Time - changes perceptions of value and risk
Money - it’s non-neutral
Capital structure - what we invest in
Coordination and coordination failures

Question 3

What is Disproportionality?

Answer 3

Imbalance of supply and demand - results from market distortions.

Question 4

What are the six classic tenets of Austrianism?

Answer 4

1. Individuals choose, societies don’t. (Explain all outcomes w/r/t individual choice.)
2. Study of the market (catallaxy) looks at exchanges, formal institutions, how they interact.
3. The facts of social science are what people think they are.
4. Money is non-neutral both in how it enters and how inflation creates distortions.
5. Capital structure consists heterogeneous goods with multi-specific uses that prices must align.
6. Social institutions are the result of human action but not human design.

Question 5

What are the 7th and 8th new tenets of Austrianism?

Answer 5

7. Real growth comes only from deferred consumption.

8. Interest rates drive business cycles by informing businesses of deferred consumption.