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New classical and austrian business cycle theory: Is there a difference?

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Conclusions

To compare new classical and Austrian theory seems legitimate only with respect to a particular aspect of economic reality, namely business cycles. In the past century, Austrians have covered so many fields of economic theory that the achievements of new classicals are comparatively small. The discussions of both approaches showed that it would not be appropriate to claim that Austrians have developed theonly theory of business cycles which refers to individual behavior and choice. New classicals have rediscovered this approach and used many of the tenets for their explanation. This is not to say that new classical theory completely follows Austrian traditions. But many of the differences appear to be small or are only semantic in character.

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  1. Joachim Scheide
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Scheide, J. New classical and austrian business cycle theory: Is there a difference?. Weltwirtschaftliches Archiv 122, 575–598 (1986). https://doi.org/10.1007/BF02707381

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