“What is so Austrian about Austrian Economics?”

Modern mainstream economics is a plurocracy in which there is no orthodoxy of ideas, only an orthodoxy of method. Given the training it provides its students, mainstream economic’s natural domain is science. With the mainstream’s acceptance of complexity views of the economy, Austrian economist’s views can now get a hearing within the mainstream. Thus, within the science of economics, there is no need for a separate Austrian economics. However, there is a need for Austrian economics in political economy, that branch of economics that takes the insights of science and relates them to policy. The paper urges Austrian economics to embrace political economy as its domain, and to position its work as within political economy.

Economists, Incentives, Judgement and Empirical Work

This paper asks the question: Why has the “general-to-specific” cointegrated VAR approach as developed in Europe had only limited success in the US as a tool for doing empirical macroeconomics, where what might be called a “theory comes first” approach dominates? The reason this paper highlights is the incompatibility of the European approach with the US focus on the journal publication metric for advancement. Specifically, the European “general-to specific” cointegrated VAR approach requires researcher judgment to be part of the analysis, and the US focus on a journal publication metric discourages such research methods. The US “theory comes first” approach fits much better with the journal publication metric.

What Was “It” that Robbins Was Defining?

This paper argues that Robbins’ famous definition of economics was of “economic science” which he saw as only a narrow branch of the field of economics. The field of economics included both economic science—which his definition dealt with, and political economy--which his essay did not deal with. His prescriptive message was that policy belonged in the “political economy” branch of economics. He believed that while the science of economics should avoid value judgments as much as possible, the political economy (applied policy) branch of economics should, and must, include value judgments. That prescriptive message has been lost.: definition of economics, political economy, science of economics, Robbins, value judgments