Why is the school called "Austrian" ?
Most of its early members hailed from Austria
Who was the founder of the Austrian School?
Carl Menger
According to Taylor, what was the primary contribution of Wieser?
the theory of opportunity cost ( he also coined the term 'marginal utility' & influenced Hayek )
According to Taylor, what was the primary contribution of Bohn Bawerk?
His theory of capital and interest--emphasized the significance of time in the economic process and defined capital as the produced factors of production
What was the Methodenstreit?
The Controversy over methods between the German School and the Austrian school.
-German School believed economics should be studied through economic history.
-Austrians believed economic knowledge arises from theoretical analysis
How does the Austrian School differ from the neoclassical mainstream?
It places economics on a sound, human basis. It avoids assumptions, narrow definitions of rational behavior, and overuse of unrealistic models.
How does Austrian macroeconomics differ from the orthodox Keynesianism?
Austrian economics begins with individuals as the units of analysis--while Keynesian is built on economic aggregates that can't easily be traced to individual behavior
Are all Austrians necessarily in favor of Laissez-faire?
...
Who were the most important followers of Mises?
Israel Kirzner & Murray Rothbard
What is Marginal Utility?
The additional satisfaction a consumer gains from consuming one more unit of a good or service.
What is the law of diminishing marginal utility?
the greater the number of units of a good that an individual possesses the less he value any given unit (Menger, Walras, and Jevons)
Can utility be compared between different people?
No because their is no objective measure of utility. Utility is ordinal not cardinal.
If we take money from a rich man and give it to a poor man have raised total social utility?
It is not possible to measure--- one cannot make interpersonal utility comparisons because there is no objective measure of utility.
Does marginal utility involve a cardinal conception of utility?
No---a person may be able to say that they like an item more or less but they have no objective measure to dictate by how much
Does the term 'subjective theory of value' imply that Austrians consider their theory to be true only for some people?
No-- No one is getting tricked into exchange--Value is in the eye of the beholder. It is a personal ('subjective ') opinion of the things you trade
Can marginal utility analysis be applied to units of money?
Mises created a regressive theorem built upon Menger's capital theory and ideas of other Austrian economists (Wickstall) to prove it can be.
Why were the ideas of Menger so revolutionary? What did classical economist believe?
He grounded the science on the subjective valuations of individuals rather than any objective properties of goods and labor.
--methodological individualist : science of individual choice
Isn't the value of a good equivalent to the amount of resources used to produce it?
No the value of a good is equivalent to the subjective valuation of the good---how much an individual values the good
Other pioneers of marginal utility analysis used mathematical expositions. Why didn't Menger?
Menger understood that there are no units of utility that can be quantified. Utility (or value) is purely subjective; it does not have any physical characteristics that can be measured. Man can only have an ordinal, not a cardinal ranking of the utility o
How did Mises contribute to the debate over socialism?
Mises presented claim that centrally planned economies were doomed to fail- claimed "socialism permits no private property or exchange in capital goods and thus no way for resources to find their most valuable use
What is praxeology?
Deductive method in Economics---the study of human action
(Mises)
Name some economists influenced by Mises
Hazlitt, Rothbard, Hayeck
Why is the school called "Austrian" ?
Most of its early members hailed from Austria
Who was the founder of the Austrian School?
Carl Menger
According to Taylor, what was the primary contribution of Wieser?
the theory of opportunity cost ( he also coined the term 'marginal utility' & influenced Hayek )
According to Taylor, what was the primary contribution of Bohn Bawerk?
His theory of capital and interest--emphasized the significance of time in the economic process and defined capital as the produced factors of production
What was the Methodenstreit?
The Controversy over methods between the German School and the Austrian school.
-German School believed economics should be studied through economic history.
-Austrians believed economic knowledge arises from theoretical analysis
How does the Austrian School differ from the neoclassical mainstream?
It places economics on a sound, human basis. It avoids assumptions, narrow definitions of rational behavior, and overuse of unrealistic models.
How does Austrian macroeconomics differ from the orthodox Keynesianism?
Austrian economics begins with individuals as the units of analysis--while Keynesian is built on economic aggregates that can't easily be traced to individual behavior
Are all Austrians necessarily in favor of Laissez-faire?
...
Who were the most important followers of Mises?
Israel Kirzner & Murray Rothbard
What is Marginal Utility?
The additional satisfaction a consumer gains from consuming one more unit of a good or service.
What is the law of diminishing marginal utility?
the greater the number of units of a good that an individual possesses the less he value any given unit (Menger, Walras, and Jevons)
Can utility be compared between different people?
No because their is no objective measure of utility. Utility is ordinal not cardinal.
If we take money from a rich man and give it to a poor man have raised total social utility?
It is not possible to measure--- one cannot make interpersonal utility comparisons because there is no objective measure of utility.
Does marginal utility involve a cardinal conception of utility?
No---a person may be able to say that they like an item more or less but they have no objective measure to dictate by how much
Does the term 'subjective theory of value' imply that Austrians consider their theory to be true only for some people?
No-- No one is getting tricked into exchange--Value is in the eye of the beholder. It is a personal ('subjective ') opinion of the things you trade
Can marginal utility analysis be applied to units of money?
Mises created a regressive theorem built upon Menger's capital theory and ideas of other Austrian economists (Wickstall) to prove it can be.
Why were the ideas of Menger so revolutionary? What did classical economist believe?
He grounded the science on the subjective valuations of individuals rather than any objective properties of goods and labor.
--methodological individualist : science of individual choice
Isn't the value of a good equivalent to the amount of resources used to produce it?
No the value of a good is equivalent to the subjective valuation of the good---how much an individual values the good
Other pioneers of marginal utility analysis used mathematical expositions. Why didn't Menger?
Menger understood that there are no units of utility that can be quantified. Utility (or value) is purely subjective; it does not have any physical characteristics that can be measured. Man can only have an ordinal, not a cardinal ranking of the utility o
How did Mises contribute to the debate over socialism?
Mises presented claim that centrally planned economies were doomed to fail- claimed "socialism permits no private property or exchange in capital goods and thus no way for resources to find their most valuable use
What is praxeology?
Deductive method in Economics---the study of human action
(Mises)
Name some economists influenced by Mises
Hazlitt, Rothbard, Hayeck