(That is, Austrian-school economists, not people from Austria, unless the latter are also the former.)
Here’s Scott Sumner on a natural experiment in hard-line grade deflation:
OK, so the Austrians are right in this case. But I still think they are wrong about 2006-09.
This in reaction to the unsurprising-at-first-glance result that students often choose their courses to get the best grades, and when a previously-profligate department tightens the GPA purse strings, those students will switch away from that department’s courses. I say “at first glance” because grade scales are just arbitrarily-relabelled intervals; my undergraduate university awarded grades on a nine-point scale (but not a stanine), and my grad school’s 4-point scale actually went up to
eleven 4.33. Both were heavily weighted towards the top end of the interval in practice, although I suspect a handful of exceptionally deserving students scored 1s in both.
Anyway, do click through and read the whole thing.