Title: A new look at the Austrian School of Economics: review and prospects

Authors: Fu-Lai Tony Yu, Gary Moon-Cheung Shiu

Addresses: Department of Economics and Finance, Hong Kong Shue Yan University, North Point, Hong Kong. ' Hong Kong Institute of Asia-Pacific Studies, The Chinese University of Hong Kong, Shatin, Hong Kong

Abstract: This paper looks at the Austrian School of Economics from the subjectivist perspective. It begins by reviewing the major architects in the Austrian School, Carl Menger, Ludwig von Mises, Friedrich A. Hayek, Murray N. Rothbard, Ludwig M. Lachmann and Isaac M. Kirzner. The paper then elucidates the major tenets of the Austrian School of Economics, namely methodological subjectivism and interpretative economics; entrepreneurship, knowledge and coordination problems in the market process; central planning and Austrian business cycle. It highlights the agreements with public choice school, new institutional economics, evolutionary economics, feminist economics and disagreements with the Marxist economics, Neo-Ricardian School and orthodox neoclassical paradigm. It also clarifies similarities and differences between the Chicago School and Austrian School of Economics. The paper ends with further suggestions on the Austrian subjectivist approach to economic problems by using two illustrations of recent international events, Financial Crisis in 2007 and nuclear meltdown in Japan.

Keywords: Austrian School of Economics; methodological subjectivism; interpretative economics; knowledge; coordination; entrepreneurship; market process; central planning; business cycle; financial crisis 2007; climate change; nuclear meltdown; Japan.

DOI: 10.1504/IJPEE.2011.041695

International Journal of Pluralism and Economics Education, 2011 Vol.2 No.2, pp.145 - 161

Available online: 29 Jul 2011

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