Posts Tagged ‘ economics ’

Austrian capital theory and Dawn of the Planet of the Apes

August 20, 2014
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Mark Tovey  

"During an early scene of Dawn of the Planet of the Apes, in which the hyper-intelligent apes were depicted hunting for deer in the forest surrounding their settlement, someone behind me interjected 'if those apes are so smart, how come they’re hunter-gatherers?' While a decent question, he received nothing but a shush from his more etiquette-conscious companion for raising it. While there are many factors other than intelligence that are relevant to a society’s choice of an agricultural or hunter-gather economy, Austrian capital theory can go a long way in helping to explain why the apes featured in the film can be both highly-intelligent and hunter-gatherers." (08/20/14)

http://tinyurl.com/prsewpj  

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Carl Menger’s revolution

August 14, 2014
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Mateusz Machaj  

"One often wonders whether differences in economic schools of thought are big enough to justify strict theoretical segregations. One such case is 'marginal economics.' Most textbooks point to the triumvirate of Walras, Jevons, and Menger, who independently discovered the notion of marginal utility and its relevance to the pricing process. Quite often these brilliant thinkers are homogenized as more or less indistinguishable figures who paved the way for modern microeconomic theory." (08/13/14)

http://mises.org/daily/6837/Carl-Mengers-Revolution  

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Argentina: Another Keynesian success story that wasn’t their fault

August 4, 2014
posted by

Robert P. Murphy Mises Canada
by Robert P. Murphy  

"On July 30 S&P declared Argentina’s government technically in default on $13 billion of its sovereign bonds that were restructured after the government’s previous default back in 2002. Inasmuch as several of the world’s major Keynesian bloggers never tire of pointing out how great their 'model' of the economy has been performing, it’s worth reminding innocent readers of just how awful the Keynesian policy advice has been." (07/21/14)

http://tinyurl.com/kg34n62  

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How to start reforming the Federal Reserve right now

July 24, 2014
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Brendan Brown  

"An essential component of monetary reform should be setting interest rates free. This means no more official pegging or guidance of short-term interest rates and no attempt to manipulate in various ways long-term interest rates. Markets can do a better job of discovering the neutral rates of interest (across different maturities) and positioning market rates at any time relative to these so as to guide the economy along an equilibrium path than any set of well-informed and even well-meaning Fed officials. This is all on the big assumption that the reformers can design a monetary system around a suitable firmly placed pivot." (07/23/14)

http://tinyurl.com/llxkxmm  

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The economics of liberation theology

July 23, 2014
posted by

Acton Institute Acton Institute
by Carroll Rios De Rodriguez  

"How did dependency theory with its socialist-like proposals to solve poverty and the Marxist influence on liberation theology fuse together? One often hears disclaimers to the fact that not all dependency and liberationist writings were Marxist. This is of course true. Novak himself argued that 'liberation theology forms a tapestry much broader than its Marxist part and is woven of many colors.' It is worth stating that the work of carefully distinguishing between the various theoretical foundations suited to liberation theology, as Novak and Joseph Cardinal Ratzinger (later Pope Benedict XVI) did at the time, is not the same as trivializing the broader Marxist influences. There are some subtle differences between the Ratzinger-Novak caveat and other claims concerning the impact of Marxism." (07/23/14)

http://tinyurl.com/m2q2pbz  

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Gold as an inflation hedge

July 23, 2014
posted by

Robert P. Murphy Liberty Chat
by Robert P. Murphy  

"When he’s not bashing Austrian economics, economist Noah Smith likes to mock the allegedly paranoid contributors to ZeroHedge. For example, in a recent post at Bloomberg, Smith argued that the goldbugs were full of it and that the yellow metal offered poor protection against an irresponsible Federal Reserve. In this post I’ll explain the actual case for gold, because plenty of people (not just Noah Smith) seem to think its virtues have been exaggerated." (07/22/14)

http://www.libertychat.com/2014/07/gold-inflation-hedge-robert-murphy/  

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The neo-mercantilist hysteria over trade deficits

July 17, 2014
posted by

Joseph T. Salerno Ludwig von Mises Institute
by Joseph T. Salerno  

"One of the worst effects of modern Keynesian economics is that its total spending ('aggregate demand') approach to output and employment provides a pseudo-scientific justification for the central error of mercantilism -- an error that dates back to the sixteenth century. According to this ancient fallacy, a deficit in a nation's balance of payments results in a loss of demand, income, and jobs. This doctrine has been demolished time and again by economists during the past two-and-a-half centuries. Yet like the mythical Phoenix the mercantilist myth continually rises from its own ashes." (07/17/14)

http://tinyurl.com/ot568u4  

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AD: Eleven stages of enlightenment

July 17, 2014
posted by

Scott Sumner EconLog
by Scott Sumner  

"Over at TheMoneyIllusion I've been having a discussion of aggregate demand. What does the term actually mean? In the comment section I see lots of average people giving common sense explanations, and also experts like Nick Rowe making high-level arguments. It might help if I walked people through the various levels of enlightenment ..." (07/17/14)

http://econlog.econlib.org/archives/2014/07/ad_eleven_stage.html  

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Thomas Piketty and Mises’s “The Anti-Capitalistic Mentality”

July 13, 2014
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Andrew B. Wilson  

"As Mises notes, the critics and anti-capitalists go on telling and re-telling the same story: saying that 'capitalism is a system to make the masses suffer terribly and that the more capitalism progresses and approaches its full maturity, the more the immense majority becomes impoverished.' Indeed, that is the story Piketty tells in his book, which has soared to the top of the New York Times and Amazon best-seller lists. Does inequality rank as the great defining issue of the twenty-first century? If you agree with Piketty, it does." (07/11/14)

http://tinyurl.com/mubbbg5  

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Jean-Baptiste Say: An underrated revolutionary

July 10, 2014
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Carmen Dorobat  

"Jean-Baptiste Say’s revolutionary and unyielding spirit has left its mark on his own life and on the history of economic thought. It is important that his contributions be brought back to the attention of modern scholars, as the debate with past and present Ricardian partisans will prove to be a fruitful one." (07/10/14)

http://tinyurl.com/pwlkct7  

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R > G revisited

July 10, 2014
posted by

Liberty Unbound Liberty Unbound
by Andrew Ferguson  

Piketty’s massive tome oversimplifies to a single principle, given as r>g, meaning that the rate of return on wealth exceeds the rate of economic growth, at least in Western industrialized nations. Were this true, then income inequality would inexorably increase, and wealth would be concentrated in ever greater amounts in ever fewer hands. Of course, as Mark Skousen and Leland Yeager showed, Piketty’s principle rests on several unsustainable assumptions about the permanence of capital and the assumption of risk." (07/09/14)

http://libertyunbound.com/node/1275  

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Investors and Austrian economics

July 6, 2014
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by staff  

Interview with Robert Blumen. Blumen: "There has been tremendous growth in interest in Austrian economics among financial professionals. I started an interest group for Austrians in Finance on LinkedIn which, in a few years, has grown to almost 2,000 members from the US, South America, East, Southern, and Central Asia, Africa, and Eastern and Western Europe. Peter Schiff appears regularly on financial shows. The Mises Institute drew hundreds of people from the investment world to an event in Manhattan." (07/04/14)

http://mises.org/daily/6795/Investors-and-Austrian-Economics  

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Why timid reforms of central banks won’t work

June 30, 2014
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Frank Hollenbeck  

"The Federal Reserve System of central banking was a response to the financial panics of 1903 and 1907 that rocked the US financial system. One of the key objectives, if not the only real one, was to counterbalance the nefarious nature of fractional reserve banking. We now have experienced a century of living with a central bank and we must only conclude that it has failed as a counterbalance while making fractional reserve banking an even bigger, more nefarious master. The evidence is clear and reform of the system is not the answer. Only the abolition of this institution will begin to set our economic system on the right path." (06/30/14)

http://tinyurl.com/q2lclo8  

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The rebirth of Austrian economics

June 25, 2014
posted by

The Daily Bell
by Richard Ebeling  

"Forty years ago, during the week of June 15-22, 1974, the Austrian School of Economics was reborn during a conference in the small New England town of South Royalton, Vermont. Why was this important? Because the economists of the Austrian School have developed the most persuasive understanding of why only economic freedom can give mankind both liberty and prosperity." (06/24/14)

http://tinyurl.com/l4nrzun  

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Unpersuaded

June 24, 2014
posted by

EconLog
by Scott Sumner  

"I recently completed reading Thomas Piketty's new book entitled Capital in the Twenty-First Century. Piketty explains why the distribution of capital is becoming increasingly unequal, why we need higher tax rates on upper income individuals, and also a wealth tax on the affluent. You probably won't be surprised to hear that I was not persuaded by his arguments. I didn't expect to be persuaded. But here's what did surprise me; the book made no real attempt to persuade me. This claim requires some explanation." (06/23/14)

http://econlog.econlib.org/archives/2014/06/unpersuaded.html  

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The pope dabbles in economics

June 20, 2014
posted by

Sheldon Richman Future of Freedom Foundation
by Sheldon Richman  

"Pope Francis wrote in his recent apostolic exhortation, 'Just as the commandment 'Thou shalt not kill' sets a clear limit in order to safeguard the value of human life, today we also have to say 'thou shalt not' to an economy of exclusion and inequality.' He's right -- but not in the way he intends." (06/19/14)

http://fff.org/explore-freedom/article/the-pope-dabbles-in-economics/  

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Catholic establishment yet to be converted to libertarianism

June 19, 2014
posted by

The Canal The Canal
by Adam Dubove  

"Cardinal Maradiaga highlights that the pope's economic analysis is done 'through the point of view of the poor.' At the same time, he maintains a complicit silence with political elites who should receive the maximum punishment for the massacres, famines, and pillages that tainted and held back the great advances of the 20th century. It was not the libertarians that were behind these political, economic, and social abuses, but the very politicians that Francis has a very 'favorable opinion of, as long as they are aiming to overcome the absolute dichotomy between the economy and the common good.'" (06/18/14)

http://tinyurl.com/kna25ca  

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Turning Piketty right side up

June 18, 2014
posted by

George Reisman Ludwig von Mises Institute
by George Reisman  

"Thomas Piketty, a neo-Marxist French professor, has written a near-700-page book, published by Harvard University Press. His book is titled Capital in the Twenty-First Century, in honor of Karl Marx's nineteenth century Das Capital [sic]. It has been greeted with fervent applause from the left-wing intellectual establishment and has been on The New York Times's and Amazon.com's best-seller lists. While his book is ostensibly devoted to the study of capital and its rate of return, Piketty comes to his subject apparently without having read a single page of Ludwig von Mises or Eugen von Bohm-Bawerk, the two leading theorists of the subject." (06/18/14)

http://mises.org/daily/6783/Turning-Piketty-Right-Side-Up  

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When do hypotheticals cover their costs?

June 18, 2014
posted by

Bryan Caplan EconLog
by Bryan Caplan  

"Suppose I asked, 'Where would you buy steaks if you only shopped at stores starting with the letter Q?' A few people would wrack their brains for an answer. But most would dismiss the question: 'That will never happen, so who cares?!' Economically speaking, the popular reaction seems perfectly sensible. The cost of devising a contingency plan has little to do with the probability of the contingency. The expected benefits of devising a contingency plan, in contrast, heavily depend on the probability of the contingency. So when someone confronts you with an extremely unlikely hypothetical, spurning the question is usually the prudent course. This seems like an awkward conclusion for me." (06/18/14)

http://econlog.econlib.org/archives/2014/06/when_do_hypothe.html  

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Virtual worlds, real economics

June 18, 2014
posted by

Foundation for Economic Education Foundation for Economic Education
by Matthew McCaffrey  

"Gaming culture is a vibrant new arena of action where sound economic ideas have a real chance to take hold. There is already discussion about how in-game economies emerge and evolve -- particularly how they deal with money and inflation. But games incorporate economics at even more basic levels. Indeed, gamers are already using the economic way of thinking without even knowing it. Games are all about basic economic concepts: scarcity, choice, trade-offs, opportunity cost, trade, and entrepreneurship. If we think of games like this, we see how their virtual realities imitate real-world economic decisions." (06/17/14)

http://www.fee.org/the_freeman/detail/virtual-worlds-real-economics  

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Tyler Cowen versus Frederic Bastiat

June 17, 2014
posted by

David Henderson EconLog
by David Henderson  

"I never hold a writer responsible for a title because, almost invariably, an editor, not the writer, chooses the article's title. In this case, however, even if Tyler did not choose the title, the title is accurate. He really is arguing that major wars could spur economic growth." (06/17/14)

http://econlog.econlib.org/archives/2014/06/tyler_cowen_ver_1.html  

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A lot of Economics in One Lesson

June 13, 2014
posted by

Sandy Ikeda Foundation for Economic Education
by Sandy Ikeda  

"Economics in One Lesson (PDF) is by far Henry Hazlitt's most famous book. ... whether he intended it or not, EIOL is Hazlitt's masterpiece. It's there that he addresses and elaborates on Frederic Bastiat’s broken-window fallacy, which claims that destruction can be a gateway to wealth." (06/12/14)

http://www.fee.org/the_freeman/detail/a-lot-of-economics-in-one-lesson  

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Naive & ignoring basic economics

June 12, 2014
posted by

Don Boudreaux Pittsburgh Tribune-Review
by Don Boudreaux  

"According to Piketty, executive compensation, especially in America, has nothing to do with managers' productivity and everything to do with the cozy relationship between managers and corporate boards. Managers and board members are clubby friends scratching each other's well-massaged backs and setting each other's astronomical salaries. Specifically, Piketty blames what he assumes to be excessively high and wasteful executive pay on lax American 'social norms,' combined with cuts in income-tax rates. Piketty reasons that, because tax cuts mean that executives keep more of what they're paid, tax cuts give managers stronger incentives to lobby corporate boards harder for higher pay. (Ironically, here's one of the few occasions when Piketty recognizes that cutting taxes causes people to work harder to get higher pay!) Mysteriously, Piketty never asks the obvious question: Why do shareholders continue to invest in corporations that so wastefully spend their funds?" (06/10/14)

http://tinyurl.com/l24jmqk  

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Liberalism unbound: Free lunch and dinner — all you can eat!

June 10, 2014
posted by

Scott Sumner EconLog
by Scott Sumner  

"Here's a common theme I see. Most liberals prefer to think like accountants, not economists. The dismal science focuses too much on the 'no free lunch' concept. The idea that there are trade-offs, that incentives affect behavior. The idea that making failure less costly, also makes it more likely to occur. But liberal economists are not stupid, and as the 1990s demonstrate they are willing to adjust their policy prescriptions to reflect changing information about the market system." (06/10/14)

http://econlog.econlib.org/archives/2014/06/liberalism_unbo.html  

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What Henry Hazlitt can teach us about inflation in 2014

June 9, 2014
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by James Grant  

"The author of Economics in One Lesson, a longtime columnist for Newsweek and an editorial writer for The New York Times in the distant, pre-Krugman era, Hazlitt waged a career-long battle against inflation. He was at it in 1946 -- and he was still going strong in 1966. It may be well at this point to define terms -- Hazlitt would have certainly wanted us to." (06/09/14)

http://tinyurl.com/l3sjetx  

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