3 Questions on Austrian Economics

Economics Economics Questions
1
  1. What, if any, predictions does Austrian economics make. And if it makes any, have they been tested and how?
  2. What areas do you see as needing further research? Or is Austrian economics already fully elaborated.
  3. Do you accept the mainstream economics that Austrian economics has no counterpart to, auction theory being one example.
2

  1. No predictions about the free market, but analysis of distortions. AE does explore the logic of human action (praxeology). AE shows the real effects of policy, e.g. minimum wage laws increase unemployment among workers with market wage < minimum wage.

  2. Complexity theory (chaos theory) is hot in my opinion. It discusses free market defense and law.

  3. Don’t understand the question. Can you rephrase?

3

  1. If you mean in terms of being able to predict the prices of stocks then no, and Austrian economics never can. However Austrian economics does make predictions that, while not being testable in an extremely rigorous way, it makes general statements that are easily verifiable. In terms of predictive power it’s more like biology than mechanics.

  2. I’m afraid I’m not educated enough on the subject to answer this question.

  3. We use a completely different methodology. As such you can’t just tear off parts from different theories and stick them onto Austrian theory if they seem well enough. They need to be validated by the methods of praxeology and integrated into the larger framework.