Austrian School

An approach to economics originated by Austrian economist Carl Menger (1840–1921). He put forward a theory of value based on marginal utility which contributed to the development of neoclassical economics. In recent times the Austrian School has been identified with advocating nonintervention by governments in economic decisions.

Eugen von Böhm-Bawerk (1851–1914), a successor to Menger as professor of economics at Vienna, further developed marginal analysis in the fields of capital and interest rate theory. In the 20th century, the major contributors to the development of the Austrian School were Ludwig von Mises (1881–1973) and Friedrich von Hayek (1899–1992), who stressed the deductive rather than inductive approach to economic reasoning, and identified market forces as the most efficient mechanism for resource allocation.