Posts Tagged ‘ economics ’

Ignoring the differences between free markets and state capitalism

March 24, 2015
posted by

Kevin Carson Future of Freedom Foundation
by Kevin Carson  

"The basic phenomenon that Thomas Piketty devotes [Capital in the Twenty-First Century] to describing is simple: 'When the rate of return on capital significantly exceeds the growth rate of the economy ... then it logically follows that inherited wealth grows faster than output and income.' His historical account of wealth accumulation, the mass of statistical evidence he musters in support of it, and his analysis of present-day trends are all an excellent read. His weakness lies, not in his description, but in his prescription: his analysis of the root causes of the concentration of wealth and the remedies he proposes." (03/23/15)

http://tinyurl.com/lkzj95q  

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What should we do if Piketty is right?

March 23, 2015
posted by

Adam Smith Institute Adam Smith Institute
by Ben Southwood  

"The biggest non-fiction book release of 2014 was surely Thomas Piketty's Capital in the 21st Century which managed to inspire a frenzy of response from academics, the intelligentsia, and even huge sales. I hope I can fairly reduce his argument to the claim that wealth inequality will widen if the return on capital (r) is higher than the growth rate (g)." (03/23/15)

http://tinyurl.com/nf98lvb  

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239 years of The Wealth of Nations

March 10, 2015
posted by

Eamonn Butler Adam Smith Institute
by Dr Eamonn Butler  

"Today is the 239th anniversary of the publication of The Wealth of Nations by Adam Smith. For nearly a quarter of a millennium, we have actually known the principles by which wealth is created and maximised. The trouble is, that for a fair chunk of the same time, we have been trying to resist that information, thinking that we can somehow do better than the market." (03/09/15)

http://tinyurl.com/pas3e24  

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Inspired by Bryan Caplan on straw-manning

March 10, 2015
posted by

Don Boudreaux Cafe Hayek
by Don Boudreaux  

"Most people are never exposed to the economic way of thinking (or, worse, are exposed to economics only by professors who treat economics as if it were a branch of applied mathematics). And most people wish to fit in, to be popular, to not be seen as holding unconventional opinions. So most people -- intelligent and well-meaning -- are carriers of horribly mistaken myths about the way economies work and hang together." (03/09/15)

http://tinyurl.com/o4llddm  

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Paul Krugman and the foundations of economic science

March 5, 2015
posted by

Don Boudreaux Cafe Hayek
by Don Boudreaux  

"Of course the market for human labor differs in detail from the market for other goods and services such as automobiles. Contrary to Krugman's suggestion, however, these differences do not render standard supply-and-demand analysis any less applicable to the market for human labor than it is to the market for automobiles. After all, the market for automobiles differs in detail also from the market for zucchinis, yet I doubt that Krugman would assert that such differences mean that the same supply-and-demand analysis used successfully to explain the workings of the market for automobiles doesn't work to explain the workings of the market for zucchinis." (03/04/15)

http://tinyurl.com/qat24rk  

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Piketty, returns to capital, and public pension privatization

February 20, 2015
posted by

kevinvallier Bleeding Heart Libertarians
by Kevin Vallier  

"If the returns to capital diminish to any significant degree, there may be a manageable limit to how much capital the rich care to accumulate vis-a-vis the poor, and that would complicate the story of ever increasing inequality. By downplaying the DMU of capital, Piketty can claim that the return to capital has been around 4%, on average, for decades. But doesn't this claim undermine the strongest progressive objection to privatizing social security? Progressives say that the stock market is an unreliable wealth generator, even in the long-run, for the lower economic classes. But if Piketty is right, this story is likely incorrect." (02/19/15)

http://tinyurl.com/ohxvbnc  

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Apocalypse Not: The legacy of Julian Simon

February 13, 2015
posted by

Independent Institute
by Aaron Tao  

"February 12 marks the birthday of the late economist Julian Simon (1932-1998). On this special occasion, I wish to bring attention to this thinker whose work I feel has not been fully appreciated. The implications of his controversial but time-tested ideas certainly deserve greater attention in academia and society at large." (02/12/15)

http://tinyurl.com/o4t7ey7  

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Attack of the pseudo-economists

February 5, 2015
posted by

The Canal The Canal
by Adrian Ravier  

"In my professional opinion, university courses for the social sciences and the so-called hard sciences should both include a component involving economics. After all, graduates of whatever stripe invariably go on to be part of one market or another, and they shouldn't be alien to its dynamic, or without a minimal understanding of how its prices are formed, and the consequences of state interventionism." (02/05/15)

http://blog.panampost.com/editor/2015/02/05/attack_pseudo_economists/  

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How much longer can the US economy bear the burdens?

February 3, 2015
posted by

Robert Higgs Ludwig von Mises Institute
by Robert Higgs  

"Ordinary people, and sometimes experts as well, tend to overreact to short-term economic changes. The current economic malaise in the United States and Europe has brought forth a bevy of commentators convinced that this time the economy has taken a permanent turn for the worse. Never again, they declare, will we enjoy growing prosperity as we did in days of yore. Some of these Chicken Littles do see a possible means of escape from the impending doom, but only if the government carries out an extraordinarily bold economic rescue program, flush with such Keynesian measures as unprecedented monetary 'quantitative easing' and large ongoing deficits in the government budget. Anything else, they insist, condemns us to languish indefinitely in a 'liquidity trap' characterized by diminished rates of employment and slow, if any, economic growth. Economic historians know, however, that such declarations are hardly new and that the economy's long-run trend has continued to tilt upward for two centuries despite the short-run ups and downs around the trend line." (01/30/15)

http://mises.org/blog/how-much-longer-can-us-economy-bear-burdens  

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The blurry line between competition and cooperation

February 3, 2015
posted by

EconLog Library of Economics and Liberty
by Timothy Taylor  

"What is the opposite of 'competition?' If you fear that this is a trick question and run off to check a synonym/antonym dictionary, you will find an answer that probably came to mind in the first place: 'cooperation.' Indeed, many people view economics as morally suspect because they perceive economics as emphasizing competition, rather than the arguably more virtuous approach of cooperation. When I bump into this concern, I often respond that economics seeks to analyze the world as it is, not as we might prefer it to be." (02/02/14)

http://www.econlib.org/library/Columns/y2015/Taylorcompetition.html  

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Europe’s move in the direction of more monetary mischief

January 28, 2015
posted by

Richard M. Ebeling Future of Freedom Foundation
by Richard M Ebeling  

"The European Central Bank has announced its intention to create out of thin air over one trillion new Euros from March 2015 to September 2016. The rationale, the monetary central planners say, is to prevent price deflation and 'stimulate' the European economy into prosperity. The only problem with their plan is that their concern about 'deflation' is a misguided fear, and printing money can never serve as a long-term solution to bring about sustainable economic growth and prosperity." (01/27/15)

http://tinyurl.com/qdkwwdu  

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A graphical introduction to the Austrian Business Cycle Theory

January 27, 2015
posted by

Mises Canada
by Gaurav Mehra  

"Business cycles, simply put, are the fluctuations of economic growth about an economy’s long-term trend. Identifying the symptoms of business cycles is simple enough but identifying their cause is a much more formidable task. Indeed, many theories have tried and many have failed to provide convincing causational links. Many economists and politicians have even come to accept business cycles as an inherently pernicious trait of capitalism. This article attempts to explain, to the best of its author’s ability, a relatively forgotten and anti-conventional theory that aims to explain business cycles; the Austrian Business Cycle Theory (ABCT)." (01/27/15)

http://tinyurl.com/mr5kogk  

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The (Austrian) economics of gifts

January 18, 2015
posted by

Mises Canada
by Garrett Petersen  

"While we typically think of entrepreneurs as businessmen, consumers also act as entrepreneurs. The necessity of forecasting under conditions of uncertainty and risk is what makes an act entrepreneurial, and there is plenty of uncertainty in consumer decision making. If I plan on buying a pair of rain boots, I must estimate how often I will be walking in the rain. My judgement as to whether I should buy at a given price depends on how expensive I think rain boots will be elsewhere and in the future. I wouldn't pay $200 for rain boots if I expected the price to drop to $20 tomorrow. Thus, buying rain boots is clearly an entrepreneurial act. This means that there is more to consumption decisions than simply knowing one’s own preferences." (01/16/15)

http://tinyurl.com/mcddgsu  

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Switzerland frees the Swiss franc

January 17, 2015
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Frank Hollenbeck  

"You can fix your currency or you run independent monetary policy. But you cannot do both at the same time. In spectacular fashion, the Swiss government finally capitulated and decided control over the money supply was more important than a fixed rate against the euro. The Swiss franc rocketed up 30 percent in value minutes after the central bank’s decision to let the currency float." (01/17/15)

http://mises.org/library/switzerland-frees-swiss-franc  

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Seeing with reason

January 14, 2015
posted by

Pittsburgh Tribune-Review
by Donald J Boudreaux  

"A frequent complaint about economics is that the failure of most economists to predict the 2008 financial crisis means that economics isn't really scientific. It's true that most economists didn't predict the crisis, but the ability to make such specific predictions is not the hallmark of science." (01/13/15)

http://tinyurl.com/ntac4wo  

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Piketty makes up “facts” and I’m the bad guy

January 14, 2015
posted by

Robert P. Murphy Free Advice
by Robert P Murphy  

"Both ideological friends and foes have been chiding me for (in my paper co-authored with Phil Magness) focusing on trivial details, like Piketty getting the dates wrong for tax hikes and minimum wage increases. Big deal, Murphy! Focus on the inequality data. But Phil and I couldn't ignore the boneheaded mistakes. Chris Giles of the FT did exactly what my critics are suggesting, and he was in the news for a week. Then Piketty responded (quite inadequately), Piketty’s fans said, 'Heh what tools, leave the data to the grownups, kids,' and now progressive bloggers smirk at you if you bring up Giles. And that is understandable. Giles was a writer for a newspaper, whereas Piketty is an expert in this literature -- a guy whom Larry Summers said should get a Nobel for the empirical work. Without taking 2 months to read up on the literature yourself, how could you possibly weigh in on this matter? So that's why it's so important for Phil and me to show you just how unbelievably sloppy Piketty was when it came to things that a high school student should get right in a term paper, and then to see him dismiss them as 'typos.'" (01/14/15)

http://tinyurl.com/mhguocd  

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How reducing GDP increases economic growth

January 13, 2015
posted by

Joseph T. Salerno Mises Canada
by Joseph Salerno  

"Now it is certainly true that a reduction in real government spending causes a reduction in real GDP, as it is officially calculated. But contrary to Mr. Klein, the reduction in government spending does not retard the growth of production of goods that satisfy consumer demands and, in fact, most likely accelerates it. In addition, real incomes and living standards of producers/consumers in the private sector rise as a direct result of the decline in government spending. The reason for this seeming paradox lies in the conventional method used to calculate real output in the economy. Let me explain with a simple example." (01/12/15)

http://tinyurl.com/qfzesej  

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Free Thoughts Podcast, 01/12/15

January 12, 2015
posted by

Libertarianism.org Libertarianism.org
by  

"Peter Van Doren returns to Free Thoughts for a discussion on public choice economics and how it affects political decision making." [Flash audio or MP3] (01/12/15)

http://tinyurl.com/mnx8owp  

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Why economists get it wrong

January 12, 2015
posted by

The Canal The Canal
by Adrian Ravier  

"The media, and public debate, are currently home to many complaints that economists are failing to make accurate macroeconomic predictions. The critique goes beyond doubts about the art of prediction, often also attacking the scientific character of economics. For economics is a science, and perhaps one of the most complex there is." (01/09/15)

http://tinyurl.com/oajqzx5  

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Uber and basic economics

January 11, 2015
posted by

Mises Canada
by James E Miller  

"Last year, the car-sharing service Uber had the privilege of being a prime target of the capitalist-loathing left. Not only did the company challenge traditional barriers to entry established by government-friendly cartels, but it earned the distrust of the mainstream press. Much of this antagonism was driven by an off-the-cuff, undignified remark made by senior executive Emil Michael at a dinner in which he suggested the company dig up unseemly personal details about reporters. Michael later apologized for the remarks, and admitted he didn’t know the conversation would be on the record. The comments, scandalous and improper as they are, were not without sympathy. The press shamelessly made sure that Uber had a rough 2014." (01/08/15)

http://mises.ca/posts/blog/uber-and-basic-economics/  

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The economics of tax dodging

January 7, 2015
posted by

EconLog EconLog
by Pierre Lemieux  

"Dodging taxes can take two forms: 'tax avoidance,' which is legal, as it uses loopholes included (often intentionally) in tax laws; and 'tax evasion,' which is illegal. The multifaceted campaign against tax dodging targets both individuals and corporations. Ultimately, of course, only individuals pay taxes. Is dodging taxes bad? And what explains the recent government outcry? To answer these questions, we need to inquire into the consequences of tax dodging. These consequences, in turn, depend on how government works." (01/05/15)

http://www.econlib.org/library/Columns/y2015/Lemieuxtaxdodging.html  

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An exceptional economist

January 5, 2015
posted by

Liberty Unbound Liberty Unbound
by Mark Skousen  

"When I first saw the list of 'Seven Bad Ideas' by Jeff Madrick, I thought of the biblical refrain, 'Woe unto them who call evil good and good evil' (Isaiah 5:20). How can he consider the Invisible Hand, Say's law, limited government, low inflation, efficient markets, free trade, and economics as an objective science to be 'bad ideas?' Then I read the book, and came to the conclusion that Jeff Madrick is an exceptional economist. By that I mean that Madrick considers all the above ideas to be good except when they are misused by economists and government officials who engage in 'dirty economics.'" (01/04/15)

http://libertyunbound.com/node/1353  

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Markets describe reality; models should explain market reactions

December 22, 2014
posted by

Scott Sumner EconLog
by Scott Sumner  

"Paul Krugman has a new post that explains why he is pessimistic about monetary stimulus at the zero bound. He briefly describes his 1998 paper on the zero bound problem. This paper shows that if base money and bonds are perfect substitutes at the zero bound, and if monetary stimulus is expected to be temporary (i.e. not to affect future money supplies) then conventional open market purchases are ineffective at the zero bound. From a technical perspective, there is nothing wrong with Krugman's model. The real problem is the way he uses the model." (12/20/14)

http://econlog.econlib.org/archives/2014/12/markets_describ.html  

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Epic fail: 100 years of the Fed

December 17, 2014
posted by

Jeffrey Tucker Foundation for Economic Education
by Jeffrey A Tucker  

"The most surprising monetary innovation of our time is bitcoin, a privately produced digital currency and payment system. It is a global system that provides a dramatic alternative to central banking and monetary nationalism as we know it. As with other innovations, such as email and texting, it could challenge the dominance of government policies. What will we lose if the private system replaces the government-managed one? A look at the history of central banking -- and the theories behind the history -- shows that we only stand to lose a system that has proven unworkable and dangerous in every way." (12/17/14)

http://fee.org/freeman/detail/epic-fail-100-years-of-the-fed  

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The ECB: Is it a hopeless case?

December 17, 2014
posted by

Scott Sumner EconLog
by Scott Sumner  

"Remember the joke about the motorist who gets lost, and then asks for directions to Podunk? The farmer replies, 'If I was headed to Podunk, I wouldn't start from here.' Yes, and if I was targeting inflation at 1.9%, I would not start from a position of negative 5-year inflation expectations in the eurozone's most prosperous country. But first let's review how they got so far off course." (12/16/14)

http://econlog.econlib.org/archives/2014/12/the_ecb_is_it_a.html  

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