Posts Tagged ‘ economics ’

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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The Fed won’t let the economy heal

June 8, 2014
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Frank Shostak  

"According to popular thinking, the Fed’s actions have bought time to allow the US economy to heal -- much like keeping a coma patient on life support. Consequently, popular thinkers are harshly criticizing commentators that advocate allowing economic recession to take its course. Contrary to popular thinking, economic recessions or economic busts are not about the end of the world but about the removal of various non-productive activities, also labeled as bubble activities brought about by previous loose monetary policies of the central bank." (06/06/14)

http://mises.org/daily/6773/The-Fed-Wont-Let-the-Economy-Heal  

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Using more government intervention to undo effects of previous round

June 6, 2014
posted by

Robert P. Murphy Free Advice
by Robert P. Murphy  

"The alleged experts in academia and the central banks around the world assure us that left to its own devices, capitalism would lead to unconscionable inequality as well as intolerable boom-bust cycles. Yet it is central banks themselves that fuel massive asset bubbles -- which accrue as capital gains in the pockets of the elites -- that eventually burst and cause a depression. Then, when at least normal market forces would punish the most reckless of the speculators, these same experts assure us that massive bailouts are necessary, lest 'laissez-faire capitalism' implode from its own contradictions. Then, after the central bank and central government use inflation and taxpayer money to bail out the fat cat investment banks (while letting homeowners go under), we are lectured by the very same experts on how unfair the whole system is, which concentrates gains in the hands of the 1%." (06/04/14)

http://tinyurl.com/njaopdw  

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Happy birthday, Adam Smith

June 6, 2014
posted by

Alberto Mingardi EconLog
by Alberto Mingardi  

"Both Ricardo and Smith wrote to persuade their audiences, though they had very different backgrounds. Ricardo was a formidable entrepreneur before becoming a theoretical economist, and his first contributions dealt with the day's monetary problems. Smith was a moral philosopher who set out to solve a tremendous puzzle: how is it that men cooperate one with each other?" (06/05/14)

http://econlog.econlib.org/archives/2014/06/happy_birthday_4.html  

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The exchange value of a magic bean

June 6, 2014
posted by

Sarah Skwire Foundation for Economic Education
by Sarah Skwire  

"Once upon a time there was a boy named Jack. Jack lived with his mother and they were very poor. They were so poor that they had nothing but their little shack, the clothes that they wore, and one milk cow. Soon, Jack’s mother decided that they had no choice but to sell their cow, get what they could for her, and hope that money would last them long enough for times to get better. And so Jack took the cow to market. You all know how this story goes, right?" (06/05/14)

http://tinyurl.com/ouw9w7c  

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More on how inheritance is becoming less important

June 6, 2014
posted by

Tim Worstall Adam Smith Institute
by Tim Worstall  

"One of Piketty's little insistences is that inheritance already plays a much more important part in who is rich that it used to in mid-century. And, of course, that this is bad. And thus our little picture of Ms. Hilton. For as far as I know she's famous for being an heiress. But also, at least as far as I know, she's not inherited. She has however made her own fortune by being known as a future heiress. Which doesn't really support Piketty all that much." (06/05/14)

http://tinyurl.com/otnojsv  

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Household inequality is not individual inequality

June 5, 2014
posted by

Don Boudreaux Cafe Hayek
by Don Boudreaux  

"Although the Gini ratio for households is indeed today at an all-time high, the Gini ratio for individuals has remained flat since 1960. This reality means that, because income inequality among persons hasn’t risen in more than a half-century, the rise in inequality among households over that time is caused by changes in the composition of households. Specifically what’s happened is that, starting around 1970, the percentage of single-person households (especially those of women over the age of 65) has increased." (06/04/14)

http://tinyurl.com/or5ms44  

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The wisdom of Adam Smith for our times

June 5, 2014
posted by

Heartland Institute Heartland Institute
by Richard Ebeling  

"The continuing growth in government spending, taxing and regulation of economic affairs in the United States and in many other parts of the world has raised anew the essential issue of political control and intervention in the market place. With June 5th marking the 291st birthday of the famous Scottish economist, Adam Smith, it is, perhaps, worthwhile to recall his insights on the superiority of the free market in place of the heavy hand of government." (06/05/14)

http://tinyurl.com/p2uebhf  

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There is no tradeoff between inflation and unemployment

June 5, 2014
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Chris Casey  

"The Federal Reserve believes increasing the money supply spurs economic growth, and that such growth, if too strong, will in turn cause price inflation. But if the monetary expansion slows, economic growth may stall and unemployment will rise. So the dilemma can only be solved with a constant iterative process: monetary growth is continuously adjusted until a delicate balance exists between price inflation and unemployment. This faulty reasoning finds its empirical justification in the Phillips curve. Like many Keynesian artifacts, its legacy governs policy long after it has been rendered defunct." (06/05/14)

http://tinyurl.com/mby6r3c  

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Do “productivity” and lagging wage growth disprove marginal productivity theory?

June 5, 2014
posted by

Robert P. Murphy Free Advice
by Robert P. Murphy  

"Yikes! Everyone see the outrage? The productivity of labor has been rising nicely for decades, and yet real labor compensation hasn't kept up. Therefore, according to my critics, I've got my head buried in my Econ 101 textbook and need to look out the window at the real world. Workers apparently don't get paid more, even as accumulating capital goods make their labor hours more physically productive. I will do a more comprehensive response elsewhere, but here I just want to post the results of a simple Excel demonstration." (06/04/14)

http://tinyurl.com/lgg8u7g  

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Why central bank stimulus cannot bring economic recovery

June 4, 2014
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Patrick Barron  

"Today every central bank on the planet is printing money by the bucket loads in an attempt to stimulate their economies to escape velocity and a sustainable recovery. They are following Keynesian dogma that increasing aggregate demand will spur an increase in employment and production. So far all that these central banks have managed to do is inflate their own balance sheets and saddle their governments with debt. But make no mistake, central banks are not about to cease their confidence in the concept of insufficient aggregate demand." (06/04/14)

http://tinyurl.com/ktp26am  

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Economics never stops: On the costs and benefits of climate change

June 4, 2014
posted by

Art Carden EconLog
by Art Carden  

"Even if the planet is getting hotter (I'm pretty sure it is) and even if people are contributing to it (I'm pretty sure we are), it's still not clear where climate change ranks on the scale of existential threats to life on Earth or whether it would be wise to sacrifice a lot of production in order to mitigate it. Asteroids might pose a larger and more immediate existential threat than climate change, and dealing with asteroids on a collision course with Earth will likely require a much more sophisticated solution than 'burn fewer fossil fuels, plant more trees, and develop cleaner energy sources.'" (06/04/14)

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

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Review: Capital in the 21st Century

June 4, 2014
posted by

Robert P. Murphy Free Advice
by Robert P. Murphy  

"Carlos Lara and I put out a monthly financial magazine, the Lara-Murphy Report. In May I had a full-length review of Piketty. The best way I could think to showcase it here, was to do screen shots of the pages. So here ya go ..." (06/03/14)

http://tinyurl.com/qbkr5j6  

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Piketty, revolution and inequality: A reply to Schliesser

June 4, 2014
posted by

kevinvallier Bleeding Heart Libertarians
by Kevin Vallier  

"Eric Schliesser has written a thoughtful and even-handed criticism of my post on Piketty and social stability. Eric is worried that I did not focus enough on the fact that simple perceptions among the public about inequality, fairness and injustice are major contributing factors to revolution. He is surely right about this, and it gives me the chance to clarify my argument." (06/03/14)

http://tinyurl.com/kvyewgx  

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