Complexity, Policymaking, and The Austrian Denial of Macroeconomics

In Bert Tieben, Victoria Chick & Jesper Jespersen (eds.), Routledge Handbook of Macroeconomic Methodology. Routledge (2023)
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Abstract

Economists associated with the Austrian School of Economics are known to deny the value of macroeconomics as descended from the work of John Maynard Keynes and, especially, his followers. Yet, Austrian economists regularly engage in a related scientific activity: theorizing about the causes and consequences of economic fluctuations, i.e., the business cycle. What explains the Austrians’ willingness to engage in theorizing about the business cycle while denying the scientific import of macroeconomics? The present paper argues that the methodological precepts of the School, which have remained largely in place since Carl Menger first pronounced them at the start of the Methodenstreit, justify the kind of business-cycle theorizing that Austrians do and imply the limited scientific value of macroeconomics as descended from Keynes.

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Scott Scheall
Arizona State University

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