Austrian vs Keynesian Economics
Austrian Economics
- Free market are efficient.
- Companies should be allowed to fail to eliminate least efficient business. Also alocate more resources to most efficient business.
- Inflation is a negative event because it destroys savings and devalues currencies.
- Support convertible currency which is backed by gold or other hard assets, or sound money.
- Book by Carl Menger: "Principles of Economics".
- Figures: Carl Menger, Ludwig von Mises and Friedrich Hayek.
Keynesian Economics
- Free market are inefficient and volatile.
- Government should implement policies to stabilize economy and mitigate recessions.
- Support fiat currencies, which can be manipulated by central banks to adjust the money supply and stabilize the economy.
- Book by John Maynard Keynes: "The General Theory of Employment, Interest and Money".
- Figure: John Maynard Keynes.