Posts Tagged ‘ economics ’

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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Everything popular is wrong: Malinvestment and consumers

June 3, 2014
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by J. Dayne Girard  

"Malinvestment, while misunderstood by many, is nonetheless an easy concept to grasp. Imagine that the government decided that cars were unsafe and, therefore, more people should drive trucks. To encourage the use of trucks over cars, the government offers easy credit to truck buyers through a federal truck loan program. The easy credit creates an artificially high demand for trucks, increasing revenue and profits for truck manufacturers at the expense of other industries. The easy credit encourages more people to buy trucks than would otherwise buy them. That’s malinvestment in a nutshell -- capital being diverted from somewhere to somewhere else through government intervention." (06/03/14)

http://tinyurl.com/ktvszjy  

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Piketty on Kuznets

June 3, 2014
posted by

Scott Sumner EconLog
by Scott Sumner  

"I have two big objections with Pikitty's characterization of Kuznets---the overall impression he creates, and the specific use of the term 'optimistic.' In fact, Kuznets was extremely pessimistic about income inequality in the third world, and didn't think simplistic free market policies would work." (06/02/14)

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

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Chances are that you have no more expertise in economics than you have in astrophysics

June 2, 2014
posted by

Robert Higgs Independent Institute
by Robert Higgs  

"Look, I’m not going to lie to you: I’m an economist. I’m not bragging about this professional status; it’s simply a fact. If I were a plumber or a carpenter, I’d admit being one just as readily. Now, tens of thousands of other people also say that they are economists, but scarcely any of them is so in more than a nominal sense. They may have a Ph.D. in economics, yet it remains the case that their ideas about economics are no better than your average crackpot's. The overwhelming part of what people learn in graduate school in economics is mathematical mumbo-jumbo whose substance boils down -- if it boils down to anything, rather than simply evaporating -- to what F. A. Hayek called the pretense of knowledge." (05/29/14)

http://tinyurl.com/q7xhjtg  

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Cliches of progressivism #7: The free market ignores the poor

June 1, 2014
posted by

Foundation for Economic Education Foundation for Economic Education
by Leonard E. Read  

"Once an activity has been socialized, it is impossible to point out, by concrete example, how men in a free market could better conduct it. How, for instance, can one compare a socialized post office with private postal delivery when the latter has been outlawed? It’s something like trying to explain to a people accustomed only to darkness how things would appear were there light. One can only resort to imaginative construction." (05/30/14)

http://tinyurl.com/l2hxxaw  

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Thomas Piketty wants to keep billions of people poor to stop a few from becoming rich

May 30, 2014
posted by

Robert P. Murphy Rare
by Robert P. Murphy  

"French economist Thomas Piketty’s Capital in the Twenty-First Century is an almost 700-page book written by an academic economist, filled with historical statistics and theoretical discussions of 'Cobb-Douglas production functions.' And yet, it somehow was the #1 bestselling book on Amazon. What the heck is going on here? The answer is the conclusion Piketty draws: He wants the governments of the world to coordinate their efforts, sharing financial information among themselves so that no human being on Earth can hide from confiscatory taxes on both wealth and income. It is because today’s self-described 'progressives' share Piketty’s hatred for economic inequality that they celebrate his book." (05/29/14)

http://tinyurl.com/lpgzxs6  

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Natural disasters don’t increase economic growth

May 27, 2014
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Frank Hollenbeck  

"Hurricane season is nearly upon us, and every time a hurricane strikes, television and radio commentators and would-be economists are quick to proclaim the growth-boosting consequences of the vicissitudes of nature. Of course, if this were true, why wait for the next calamity? Let’s create one by bulldozing New York City and marvel at the growth-boosting activity engendered. Destroying homes, buildings, and capital equipment will undoubtedly help parts of the construction industry and possibly regional economies, but it is a mistake to conclude it will boost overall growth." (06/27/14)

http://tinyurl.com/lwmkue7  

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Immortal Keynes?

May 27, 2014
posted by

Sheldon Richman Future of Freedom Foundation
by Sheldon Richman  

"Whatever you may think of Keynesian economics, you have to give it credit for one thing: its staying power. You can’t watch a news program without hearing pundits analyze economic conditions in orthodox Keynesian terms, even if they don’t realize that’s what they’re doing. One TV personality says that the rejection of Keynes indicates a disbelief in all science! What accounts for this staying power?" (05/23/14)

http://fff.org/explore-freedom/article/tgif-immortal-keynes/  

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Sheldon Richman on the Scott Horton Show

May 27, 2014
posted by

The Scott Horton Show
by  

"Sheldon Richman, vice president of The Future of Freedom Foundation, discusses the incredible staying-power of Keynesian economics despite its fundamental flaws." [Flash audio or MP3] (05/23/14)

http://scotthorton.org/interviews/2014/05/23/052314-sheldon-richman/  

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