“Although economic prosperity is linked to core tenets of Austrian economics, namely economic and political freedom,[10] the school is routinely dismissed by mainstream macroeconomists.[11] ” Why the Mainstream Fails to Understand Recessions – Hal Snarr – Mises Daily

Although economic prosperity is linked to core tenets of Austrian economics, namely economic and political freedom,[10] the school is routinely dismissed by mainstream macroeconomists.[11] This is so despite prices falling, quality rising, and consumer choice increasing in markets that are relatively free of government intervention e.g., cellular phones, televisions, software, and computers. On the other hand, inflation, stagnant quality, inefficiency, or moral hazard is typical of industries regulated, managed, or owned by government e.g., banking, education, healthcare, and the post office. Thus, it is surprising that the school has not gained wider acceptance. This is perhaps due to mainstream macroeconomics offering sellable solutions. Whereas Austrian economists generally refuse to support politically-popular welfare programs when unemployment is high, mainstream macroeconomists do not. Keynesian “solutions” like public works projects, extensions to unemployment insurance compensation, and payroll tax cuts, are well-received among working-class voters. Supply-side and Chicago-School policy prescriptions, like capital gains tax rate cuts, low interest rates, and deregulation, appeal to investors and entrepreneurs.

via Why the Mainstream Fails to Understand Recessions – Hal Snarr – Mises Daily.

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