Volume 3, No. 2 (Summer 2000)
The main reason why, at least at present, Austrian economics is particularly relevant is that it offers a strong challenge to some off the most basic assumptions underlying mainstream models—the assumptions that are so useful that they are most likely to be taken for granted. These include perfect competition, equilibrium, stable preferences, given technology and Pareto efficiency as a welfare criterion. This takes me back to my earlier point that model-building is the key to understanding the difference between Austrian economics and the mainstream. I remain on the boundary between the two traditions in the sense that while I see a greater role for model-building than do most Austrians, I share with many Austrians the view that there is a great danger from their misuse.
