Playing at markets: A New Austrian perspective on macroeconomic policy

Abstract

The New Austrian (also called Neo-Mengerian) paradigm emphasizes the importance of nonequilibrium and emergent processes in explaining the social world. In this paper I analyze macroeconomic policy from a New Austrian perspective. I define macroeconomic policy broadly, encompassing not only policy relating to business cycles and growth, but to any policy aimed at directly manipulating emergent variables. Such policy is fundamentally incoherent, since it attempts to divorce social outcomes from the processes that generate them and give them meaning. A New Austrian approach to macroeconomic policy, which focuses on the rules structuring nonequilibrium-emergent social processes, avoids this problem.

Austrian Macroeconomics in Search of Its Uniqueness

“…Others might use it to denote a more modern variation, which Garrison (2005) has called "capital-based macroeconomics." Still others refer to a "new Austrian" or "neo-Mengerian" macroeconomics (Salter 2017;Wagner 2007Wagner , 2010Wagner , 2012.…”