Does the Austrian school and the Keynesian school have any areas where they share that SAME economic theories?
To an extent I think AE and KE both agree on the non-neutrality of money and the primacy of uncertainty (animal spirits).
During an economics class I asked my professor why, if spending was so good for the economy, the stimulus measures weren't multiplied by tenfold. He responded by saying that the stimulus should have at least been doubled, but countered that multiplying it by tenfold would amount to inflation.
So in effect, Austrians and Keynesians agree that increasing the money supply creates inflation.
Keynesians are against a rise in prices?
Keynesians like Stiglitz have conceded to Hayek's argument on limitations of knowledge. As have many Scandinavian social democrats of the Stockholm School.
Stiglitz's agreement with limitations of knowledge of technocrats can be appreciated, if not for the fact that folks like Stiglitz still feel something "must be done" in spite of being well aware of limitations of knowledge.
It only makes me cringe further, however, when the Scandinavians use limitations of knowledge as a justification for public sector - saying that it's impossible to calculate on how a government education system should charge different students from families of different income levels in schools, and hence the only thing to do is to have only government funded schools with equal prices for both poor and rich and have equal government funding per student in all public schools, without having any private competition to cause misallocation of funds. It's one of those moments when their claims of limitations of knowledge in proper allocation of resources just makes you ask, "Then why not just have a private system and forget it?" Clearly, some schools will charge what the traffic will bear and some will charge higher for those who can afford it and so on.
But never mind - the point is that one can agree on the same thing for the wrong reasons.
Both agree that raising taxes during a depression would be dumb. I’m afraid that’s about it.
I though keynesians believe that money is not neutral in the short term but its neutral in the long term. Can anyone confirm?
Not sure, but a simplification of the schools of thought would be. Keynesians focus on nominal growth. AE focus's on value-free voluntary exchange.If a scenario occurs where these two overlap, there would be agreement.
well I think that is true, but as long as they think money is non-neutral in the short term; I count them as viewing it as "non-neutral".
It's why I said "to an extent".
The question asked about theory. Why has every answer been about policy?