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Austrian and Neoclassical Economics: Any Gains from Trade?

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  • Sherwin Rosen

Abstract

The systems aspects of Austrian economic thought pertaining to the process of competition deserve a prominent place in modern economic thinking. The paper develops the differences between the Austrian view of competition as an evolutionary process, and the neoclassical emphasis on determining market equilibrium under known or given conditions. These bear importantly on the fundamental way we think about decentralization of economic activities among highly specialized agents with incomplete knowledge and information. The role of competition as a selection device that often encourages survival of the fittest and solves some types of agency problems is well worth thinking about.

Suggested Citation

  • Sherwin Rosen, 1997. "Austrian and Neoclassical Economics: Any Gains from Trade?," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 139-152, Fall.
    • Handle: RePEc:aea:jecper:v:11:y:1997:i:4:p:139-52
    Note: DOI: 10.1257/jep.11.4.139
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.11.4.139
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology

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