production

1. What is productivity according to the Austrian School of Economics? The Austrian School of Economics views productivity as the successful alignment of subjective consumer demands with efficient, time-structured production. It rejects aggregate statistical averages, emphasizing instead that true productivity arises from entrepreneurial innovation, capital investment, and time preference (the decision to save rather than […]

Working Paper Series. Written by David Howden. Canonical Austrian business cycle theory holds that a lower rate of interest lengthens the structure of production. Fillieule (2007) derives the opposite conclusion: the average period of production rises with the rate of interest. I argue in this article that the apparent conflict dissolves once two distinct meanings of lengthening […]