Toward a New Austrian Macroeconomics

38 Pages Posted: 9 Jun 2016 Last revised: 5 Mar 2017

See all articles by Vipin P. Veetil

Vipin P. Veetil

Indian Institute of Technology Madras

Lawrence H. White

George Mason University - Department of Economics

Date Written: June 8, 2016

Abstract

Austrian macroeconomists of the interwar period saw the economy as a complex adaptive system, in which macroeconomic variables emerge from the interaction between millions of purposefully acting agents. Recent advances in computation technology allow us to build empirically salient synthetic economies in silico, and thereby formalize many Austrian insights. We present a workhorse model with firms on a production network. Macroeconomic variables evolve through the interaction between micro-economic decisions. We use the model to explain why some prices temporarily decrease in response to money injection. We also provide a sketch of other potential applications of our production network model.

Keywords: Macroeconomics, Agent-based Model, Schumpeter, Mises, Hayek, Business Cycles, Network

JEL Classification: E00, E14, E30, E40

Suggested Citation

Veetil, Vipin P. and White, Lawrence H., Toward a New Austrian Macroeconomics (June 8, 2016). Review of Austrian Economics, Vol. 30, No. 1, 2017. Available at SSRN: https://ssrn.com/abstract=2792400 or http://dx.doi.org/10.2139/ssrn.2792400

Vipin P. Veetil (Contact Author)

Indian Institute of Technology Madras

Chennai
India

Lawrence H. White

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

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