Austrian school of economics

School of economic thought / From Wikipedia, the free encyclopedia

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The Austrian School is a heterodox[1][2][3] school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result primarily from the motivations and actions of individuals and their self interest. Austrian school theorists hold that economic theory should be exclusively derived from basic principles of human action.[4][5][6]

The Austrian School originated in Vienna with the work of Carl Menger, Eugen von Böhm-Bawerk, Friedrich von Wieser, and others.[7] It was methodologically opposed to the Historical School (based in Germany), in a dispute known as Methodenstreit, or methodology quarrel. Current-day economists working in this tradition are located in many countries, but their work is still referred to as Austrian economics. Among the theoretical contributions of the early years of the Austrian School are the subjective theory of value, marginalism in price theory and the formulation of the economic calculation problem, each of which has become an accepted part of mainstream economics.[8]

In the 1970s, the Austrian School attracted some renewed interest after Friedrich Hayek shared the 1974 Nobel Memorial Prize in Economic Sciences with Gunnar Myrdal.[9]

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