Patrick Newman is an Assistant Professor of Economics at Florida Southern College and a fellow of its Center for Free Enterprise. He is the author of the book Cronyism: Liberty Versus Power in Early America and has edited many important works. Today, he will talk about how the Austrian School of Economics can help solve current economic problems and build economic systems that can last. For people who don’t know much about the Austrian School, he will give a short summary of its main ideas and principles.
Heterodox Neoclassical and Austrian economics vary. Entrepreneurship and economic productivity increase. Austrian economics values free markets and economic understanding over government action. Mainstream economists are skeptical of Austrian economics because it doesn’t define the entrepreneur and is skeptical of government involvement. However, academia depends on government money, which makes mainstream economists skeptical.
The Austrian business cycle hypothesis says that when central banks increase the money supply and artificially lower interest rates, entrepreneurs start businesses that can’t last, which causes inflation and recession. COVID-19 inflated countries. Austrian business cycle theory predicts a downturn.
Austrian economics rejects central banking and finance. They claim central banks’ monetary expansion produces unsustainable booms and busts. Austrian economics rejects central banking. Austrian economics like bitcoin. Central banks are concerned that alternative currencies will reduce dollar demand and tax collection. Many people are waiting to see how much these assets will cost and whether governments will restrict their use.
Austrian economics redefines entrepreneurship. Entrepreneurs save. Entrepreneurs may test products without innovating. Risk-takers. Entrepreneurship is defined by Austrian economics as calculated risks and unexpected business judgments.
Entrepreneurship is misunderstood nowadays. Profits trump entrepreneurship. Successful organizations forecast consumer demand and manage resources. The economy misinterprets entrepreneurs. Entrepreneurs develop economies.
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