Compare and contrast Austrian and Post-Keynesian theories of the Essay - 1

Compare and contrast Austrian and Post-Keynesian theories of the competitive process - Essay Example By removing barriers to trade, globalization aims to make business people in developed countries able to maximize cheaper human and non-human resources in developing countries. As a result of globalization, the modern business society changes in such a way that it establishes new business conditions and challenges in exchange of the previous ones. In general, the presence of market failure could adversely affect the socio-economic well-being of each individual. To avoid going through the socio-economic consequences associated with market failure, professional economists are continuously searching for effective economic strategy that could minimize the risk of developing a market failure. Competitive process is an integral part of economics. In line with this, the act of stabilizing an unstable economic condition is possible through the use of micro- and macro-economic policies. In relation to the importance of analyzing competition in the market, this study will compare and contrast the Austrian and post-Keynesian theories of competitive process. Upon reflecting the current market competition as a result of globalization, the advantages and disadvantages of the Austrian and post-Keynesian theories of competitive process will be tackled in details as part of the study conclusion. Both the post-Keynesian and Austrian economics have some argument or complaints with regards to the economic ideas presented by the neoclassical economic theories (Kirzner, 1997; Boettke, 1994, p. 220). In line with this, the post-Keynesians theory of competitive process does not accept the idea of neoclassical’s general equilibrium. It means that general equilibrium is not possible due to the fact that the market changes constantly and is often uncertain because of a lot of internal and external business factors (Brothwell, 1992, p. 193). Similar to the stand of post-Keynesian with regards to the theory of equilibrium as proposed by the neoclassical theory particularly with