Total Posts:14|Showing Posts:1-14
Jump to topic:

Questions on Keynesian and Austrian Economics

Fight4Liberty
Posts: 23
Add as Friend
Challenge to a Debate
Send a Message
4/27/2014 11:19:47 PM
Posted: 2 years ago
Hello,

Could someone please explain, in simple words, the difference between Austrian Economics and Keynesian Economics without bias? (Bias = personal opinions)

Is Austrian Economics the belief interest rates can control the economy?
Is Keynesian Economics like a circle, producer, buyer, consumer?

Thank you for your time,

Fight4Liberty
Revoloution
Jifpop09
Posts: 2,243
Add as Friend
Challenge to a Debate
Send a Message
4/28/2014 1:18:34 AM
Posted: 2 years ago
At 4/27/2014 11:19:47 PM, Fight4Liberty wrote:
Hello,

Could someone please explain, in simple words, the difference between Austrian Economics and Keynesian Economics without bias? (Bias = personal opinions)

Is Austrian Economics the belief interest rates can control the economy?

No, that would actually be Keynesian. Austrian economics are the belief that the economy can grow through individualism and the private sector, and government involvement is detrimental. It is not very well accepted.

Is Keynesian Economics like a circle, producer, buyer, consumer?

No. It is the belief that government spending can increase aggregate demand. I made a base definition to apply to Keynesian....

"An action taken by a third party to influence an economic output"

Thank you for your time,

Fight4Liberty

Hope it helps
Leader of the DDO Revolution Party
progressivedem22
Posts: 1,304
Add as Friend
Challenge to a Debate
Send a Message
4/28/2014 9:45:42 AM
Posted: 2 years ago
Austrian economics is essentially radical individualism: that people are rational actors who act with respect to their own self-interests within a framework of an autonomous market system guided by an omniscient "invisible hand." Any inefficiency is attributed to government or monetary policy and market failures are effectively overlooked -- or you'll hear the "private charity" argument.

Basically, it's a bunch of bunk.
DanT
Posts: 5,693
Add as Friend
Challenge to a Debate
Send a Message
4/28/2014 8:21:17 PM
Posted: 2 years ago
At 4/27/2014 11:19:47 PM, Fight4Liberty wrote:
Hello,

Could someone please explain, in simple words, the difference between Austrian Economics and Keynesian Economics without bias? (Bias = personal opinions)

Is Austrian Economics the belief interest rates can control the economy?
Is Keynesian Economics like a circle, producer, buyer, consumer?

Thank you for your time,

Fight4Liberty

Austrian Economics is a heterodox school of economic thought which uses an a priori approach to their research, and believes the value of goods and services are individually subjective rather than inherent. Austrians reject macroeconomics in it's entirety.

Keynesian economics is a mainstream school of economic thought, based on the works of Keynes. Keynesians use an a posteriori approach to their research, with a focus on aggregate demand. Keynesianism is the basis of modern macro, while classical economics (also rejected by Austrians) is the basis of modern micro. Classical economics, unlike Keynesian economics, tends to focus on the supply side.
"Chemical weapons are no different than any other types of weapons."~Lordknukle
Wallstreetatheist
Posts: 7,132
Add as Friend
Challenge to a Debate
Send a Message
4/30/2014 10:26:46 PM
Posted: 2 years ago
At 4/28/2014 9:45:42 AM, progressivedem22 wrote:
Austrian economics is essentially radical individualism: that people are rational actors who act with respect to their own self-interests within a framework of an autonomous market system guided by an omniscient "invisible hand." Any inefficiency is attributed to government or monetary policy and market failures are effectively overlooked -- or you'll hear the "private charity" argument.

Basically, it's a bunch of bunk.

Did you skip over "without bias?" Feel free to proselytize in other threads though.
DRUG HARM: http://imgur.com...
Primal Diet. Lifting. Reading. Psychedelics. Cold-Approach Pickup. Music.
progressivedem22
Posts: 1,304
Add as Friend
Challenge to a Debate
Send a Message
4/30/2014 10:29:38 PM
Posted: 2 years ago
At 4/30/2014 10:26:46 PM, Wallstreetatheist wrote:
At 4/28/2014 9:45:42 AM, progressivedem22 wrote:
Austrian economics is essentially radical individualism: that people are rational actors who act with respect to their own self-interests within a framework of an autonomous market system guided by an omniscient "invisible hand." Any inefficiency is attributed to government or monetary policy and market failures are effectively overlooked -- or you'll hear the "private charity" argument.

Basically, it's a bunch of bunk.

Did you skip over "without bias?" Feel free to proselytize in other threads though.

Everyone is biased. To be "without bias" is to be inhuman.
progressivedem22
Posts: 1,304
Add as Friend
Challenge to a Debate
Send a Message
4/30/2014 10:30:26 PM
Posted: 2 years ago
DanT's definition was quite thorough, though, if you're looking for a textbook account of Austrian vs Keynesian school.
Jifpop09
Posts: 2,243
Add as Friend
Challenge to a Debate
Send a Message
5/1/2014 5:11:32 AM
Posted: 2 years ago
At 4/30/2014 10:30:26 PM, progressivedem22 wrote:
DanT's definition was quite thorough, though, if you're looking for a textbook account of Austrian vs Keynesian school.

Copied from wikipedia
Leader of the DDO Revolution Party
progressivedem22
Posts: 1,304
Add as Friend
Challenge to a Debate
Send a Message
5/1/2014 8:51:58 AM
Posted: 2 years ago
At 5/1/2014 5:11:32 AM, Jifpop09 wrote:
At 4/30/2014 10:30:26 PM, progressivedem22 wrote:
DanT's definition was quite thorough, though, if you're looking for a textbook account of Austrian vs Keynesian school.

Copied from wikipedia

I googled it and couldn't find the matching wikpedia article lol. It doesn't matter though to be honest.
DanT
Posts: 5,693
Add as Friend
Challenge to a Debate
Send a Message
5/2/2014 12:26:11 AM
Posted: 2 years ago
At 5/1/2014 5:11:32 AM, Jifpop09 wrote:
At 4/30/2014 10:30:26 PM, progressivedem22 wrote:
DanT's definition was quite thorough, though, if you're looking for a textbook account of Austrian vs Keynesian school.

Copied from wikipedia

No I didn't. Austrians are big on a priori approaches, such as thought experiments. Keynesians are big on a posteriori approaches, such as statistical modeling.
Keynesians focus primarily on aggregate demand, which is the sum of all private consumption, investments, government spending, and net exports. Austrians are extreme individualists, who believe there is no point to aggregates.

Modern mainstream economics is based on Keynesian Macro and Classical Micro, both of which is rejected by Austrians.
"Chemical weapons are no different than any other types of weapons."~Lordknukle
Jifpop09
Posts: 2,243
Add as Friend
Challenge to a Debate
Send a Message
5/2/2014 12:27:12 AM
Posted: 2 years ago
At 5/2/2014 12:26:11 AM, DanT wrote:
At 5/1/2014 5:11:32 AM, Jifpop09 wrote:
At 4/30/2014 10:30:26 PM, progressivedem22 wrote:
DanT's definition was quite thorough, though, if you're looking for a textbook account of Austrian vs Keynesian school.

Copied from wikipedia

No I didn't. Austrians are big on a priori approaches, such as thought experiments. Keynesians are big on a posteriori approaches, such as statistical modeling.
Keynesians focus primarily on aggregate demand, which is the sum of all private consumption, investments, government spending, and net exports. Austrians are extreme individualists, who believe there is no point to aggregates.

Modern mainstream economics is based on Keynesian Macro and Classical Micro, both of which is rejected by Austrians.

NVM, I checked wikipedia shortly after making the accusation. Sry
Leader of the DDO Revolution Party
storytimewithjesus
Posts: 64
Add as Friend
Challenge to a Debate
Send a Message
7/3/2014 11:01:40 AM
Posted: 2 years ago
Of course, there's a lot more to why they look at things so differently than that.

Austrians believe in a more resource-centric view of economics, where resource availability and scarcity are major concepts. Goods and services are desired by people because they contribute to a person's survival and emotional wellbeing, and many resource shortages can't be solved by monetary policy alone. How much any good or service helps any individual varies from person to person, which is why the value of goods and services is subjective. The benefit is that since people actually do want and need resources to survive, it's a more accurate theoretical model. The downside is that since it's impossible to track the availability of food, oil, housing, clothing, etc. in simple terms when they're all very different things with different and subjective values, so the models don't lend themselves to real world testing and number crunching very well.

Keynesians believe in a more money-centric view of economics, where the flow of money through an economy is the central concept. People need money to buy goods and services and once you put that money in people's hands, they tend to spend it and cause that money to flow through the economy, which generates more economic activity (which is easily mistaken for a good thing in and of itself, which it is not). The benefit is that money is much easier to measure than dozens or hundreds or thousands of different resources, so Keynesians generally have a much easier time measuring and proving their hypotheses through experimentation and analysis. The downside is that money is not a perfect lens to view an economy through; many things that benefit people's survival and wellbeing are not monetized at all, and financial transactions alone do not guarantee that goods and services are actually getting to the people who need them.

Basically, say you have a population that's starving. The Keynesian says they're starving because they can't afford to buy food. The Austrian says they've starving because there's less food available per person. When your problems are a finite supply of the fossil fuels our economy runs on, loss of topsoil and drought due to poor agricultural management, major demographic shifts with growth in populations who consume more resources than they produce (retirees and prisoners especially), and global climate change due in large part to overuse of scarce natural resources, the Austrian way of looking at things and saying we have to solve our resource problems seems much more accurate to me than the Keynesian way of looking at things and saying we just have to fiddle with monetary policy until we find the right spending level to jump start our massive overconsumption of scarce resources again.
debate_power
Posts: 726
Add as Friend
Challenge to a Debate
Send a Message
11/24/2014 4:14:15 PM
Posted: 2 years ago
At 4/27/2014 11:19:47 PM, Fight4Liberty wrote:
Hello,

Could someone please explain, in simple words, the difference between Austrian Economics and Keynesian Economics without bias? (Bias = personal opinions)

Is Austrian Economics the belief interest rates can control the economy?
Is Keynesian Economics like a circle, producer, buyer, consumer?

Thank you for your time,

Fight4Liberty

Keynesians believe that aggregate demand most affects production. Austrians believe individual decisions most affect production. Keynesians believe that the prevention of recessions should be a priority. Austrians believe that the economy experiences cycles regardless of attempted recession prevention.
You can call me Mark if you like.