ABSTRACT
Macroeconomics in the Austrian tradition owes its uniqueness to the Austrian capital theory on which it is based. This is the central message of Chapter 2. But as hinted in Chapter 1, there are critics within the tradition who take “Austrian Macroeconomics” to be a term at war with itself. The Austrian label usually denotes (1) subjectivism, as applied to both values and expectations; and (2) methodological individualism with its emphasis on the differences among individuals – differences that account for the give and take of the marketplace and for the very nature of the market process. These essential features of Austrianism stand in contrast to the features of the macroeconomics that has evolved over the last several decades.
