| Description |
Hyman Minsky, a post Keynesian economist, and Ludwig Von Mises, a prominent Austrian economist, maintain fundamentally different assumptions to explain their paradigms on the role of government, equilibrium, saving, and budget deficits. These disparities are significant when trying to deduce economic outcomes, which do not rest in exclusively in one theory over another. This is especially true in regards to the 2008 financial crisis, which encouraged scholars and economists to question the rigidity of their assumptions. Mises and Minsky stress the importance of money, and banking institutions; they both assert the hazards of mal-investment, but disagree on how it transpires. Mises interprets the fluctuations in the economy as a result of government interference and lack of saving; Minsky attributes it to uncertainty, the existing financial framework, and the different methods of financing investment. The assumptions of both; economists have relevant and disputable attributes, but are essential to building a variety of legislative options into the discussion and coming up with a combination of policies to solve deeply rooted problems. As noted by John Maynard Keynes, "the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else" (Krugman 2011). |
