Did you know there are different schools of thought in economics? At Tuttle Twins Academy, our teachers follow the Austrian school of thought. In this video, you’ll hear terms like “Austrian” and “Keynesian” (pronounced “KAYN-zee-uhn”), which represent two different approaches to understanding how economies work. What do they mean?

Keynesian economics comes from John Maynard Keynes, who believed governments should step in during tough times, like recessions, by spending money to create jobs and boost the economy. It’s about using government action to keep things stable and growing.

Austrian economics, on the other hand, argues the economy works best when the government stays out of it, letting businesses and individuals make their own choices without interference.

There’s also the Chicago School of Economics, which shares the Austrian focus on free markets but supports some government actions, like adjusting interest rates or managing the money supply to control inflation. This approach blends a belief in market efficiency with targeted government intervention to address economic challenges.

These different schools of thought reflect ongoing debates about whether the government should step in or step back to keep the economy healthy.