What Makes Austrian Macroeconomics Unique?

The concept of “human action” is central to Austrian economics. From this follows an emphasis on the role of the entrepreneur as the agent to deal with uncertainty and contingency in the production process. Prices are the essential tool of economic calculation. Therefore, economic rationality requires private property and competitive markets. Long before it became a topic in conventional macroeconomics, Austrian economics already emphasized the need for a micro-foundation of macroeconomics. Due to its realist method of analyzing causal relationships, with human action at its center, Austrian macroeconomics has been able to avoid excessive abstractions, confusing formalization, and fictitious model-making. Its usefulness as a tool of analysis has been proven again and again, particularly in times of economic turmoil when conventional macroeconomics tends to fail.