This paper argues that the approach to economics that is characteristic of Austrian economists emerged out of the interaction of continental thought and classical economics. This approach begins with reflection upon the purposive action of living men, and views the market as an ongoing process...

The work of Friedrich Von Hayek contains several testable predictions about the nature of market processes. Vernon Smith termed the most important one the 'Hayek Hypothesis': equilibrium prices and the gains from trade can be achieved in the presence of diffuse, decentralized information, and in...