Posts Tagged ‘ economics ’

Fearing Hayek

December 11, 2011
posted by

Sheldon Richman Foundation for Economic Education
by Sheldon Richman  

"Economics and business reporter David Warsh is getting much attention for suggesting that F. A. Hayek, far from being one of the two most prominent economists of the 1930s -- the other being Keynes -- is rather more like the woman who was thought to have won the Boston marathon in 1980 when in fact she had joined the race, mostly unnoticed, a half-mile from the finish line." (12/09/11)

http://www.thefreemanonline.org/columns/tgif/fearing-hayek/  

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The price of money

November 27, 2011
posted by

David Friedman Ideas
by David Friedman  

"The price of money is what you have to give up to get it -- the inverse of the price level. If the price of an apple is fifty cents, the price of a dollar is two apples. The interest rate is the rent on money, measured in money. A change in the price of money affects both the money you are renting and the money you are paying as rent, leaving the ratio of the two unchanged." (11/25/11)

http://daviddfriedman.blogspot.com/2011/11/price-of-money.html  

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The economics of war

November 17, 2011
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Robert P. Murphy  

"The market economy involves peaceful cooperation. The division of labor cannot function effectively amidst a war. Warfare among primitive tribes did not suffer this drawback because the warring parties had not been engaged in trade before the hostilities. Thus they engaged in total war. Things were different in Europe (before the French Revolution) when military, financial, and political circumstances produced limited warfare." (11/16/11)

http://mises.org/daily/5664/The-Economics-of-War  

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Markets are messy, part 2

November 17, 2011
posted by

Foundation for Economic Education Foundation for Economic Education
by Steven Horwitz  

"The mainstream economists’ foremost model describes 'perfect competition.' It shows how, under particular assumptions, markets will produce ideal results: Resources will all be allocated to their highest valued use, prices of goods will reflect marginal costs of production, and producers, knowing exactly what goods consumers want, will produce them at minimum average total costs." (11/17/11)

http://www.thefreemanonline.org/headline/markets-are-messy-2/  

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Reply to Arnold on PSST

November 15, 2011
posted by

EconLog EconLog
by Bryan Caplan  

"Yes, it's conceivable for new production methods to suddenly drive millions of workers' productivity down to zero. But why on earth should we believe that this has occurred? This is an extraordinary claim requiring extraordinary evidence. If lots (say 25%) of old economy firms saw their revenues fall by 80% I might believe it. If wages fell 50% and the unemployment rate didn't budge, I might believe it. All I've seen this recession, however, is that nominal GDP sharply fell, and real GDP fell almost proportionally. That's how recessions in low-inflation economies usually work." (11/15/11)

http://econlog.econlib.org/archives/2011/11/reply_to_arnold.html  

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Price competition and price discrimination

November 13, 2011
posted by

Adam Smith Institute Adam Smith Institute
by Tim Worstall  

"Imagine a mid level supermarket, say, a Waitrose. Imagine then that a cheapy cheapy place opens next door, say an Iceland or a Lidl. Imagining? Good, now, what happens to the prices in the Waitrose? Do they rise or fall? Ah, yes, we've our old correct answer in economics again, 'it depends.'" (11/13/11)

http://bit.ly/vygte9  

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Protesting narrow economics

November 13, 2011
posted by

The Libertarian Standard
by Wirkman Virkkala  

"I am pretty sure that, had I taken economics in school, I would never have developed an interest in it." (11/11/11)

http://bit.ly/sOCp3i  

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Back to economic basics

November 13, 2011
posted by

Reason Reason
by Sheldon Richman  

"Lately I’ve landed in discussions about whether there is such a thing as human action. I’m not kidding. Some educated people have their doubts." (11/11/11)

http://reason.com/archives/2011/11/11/back-to-economic-basics  

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Sumner needs to watch some film and hit the gym

November 3, 2011
posted by

Free Advice
by Robert P. Murphy  

"The Fed today lowered its forecast for economic growth next year, and raised its forecast for unemployment. So Scott is saying, rather than refusing to pump in more money, and resting content with a worsening forecast, the Fed should do what it needs to do, so that it doesn’t have to give the public the bad news about gloomier prospects for next year. OK, now that we understand what Sumner is doing in his cute analogy, we are ready to get knocked onto the floor by how wrong the analysis is." (11/02/11)

http://bit.ly/uB3EZq  

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The fundamental fallacies of macroeconomics

October 18, 2011
posted by

Competitive Enterprise Institute Competitive Enterprise Institute
by William Frezza  

"Do you sometimes wonder why economists are accorded such respect and influence given the fact that they claim knowledge over the unknowable, promote theories that are untestable, and make forecasts for which they are never held accountable? Isn’t that the definition of a witch doctor?" (10/18/11)

http://tinyurl.com/3vf2af3  

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A comparison of the utility theory of Rothbard and Kirzner

October 17, 2011
posted by

Libertarian Papers
by Dan Mahoney  

"In this article we consider the theories of utility developed by Rothbard and Kirzner in their respective treatises on economic theory (Man Economy and State, and Market Theory and the Price System). We argue that while both authors were strongly influenced by Mises’ ordinalist conception of utility and in fact both authors affirm this conception in their initial expositions of utility theory, their subsequent developments diverge quite sharply." [abstract -- full paper available as PDF or MS Word download] (10/16/11)

http://bit.ly/p2N6Pi  

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Two Americans win economics Nobel

October 10, 2011
posted by

Associated Press    

"Americans Thomas Sargent and Christopher Sims won the Nobel economics prize on Monday for research that sheds light on the cause-and-effect relationship between the economy and policy instruments such as interest rates and government spending. ... The Royal Swedish Academy of Sciences said the winners have developed methods for answering questions such as how economic growth and inflation are affected by a temporary increase in the interest rate or a tax cut." (10/10/11)

http://tinyurl.com/4xe33m9  

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Important new evidence on regime uncertainty

October 9, 2011
posted by

Independent Institute Independent Institute
by Robert Higgs  

"The idea of regime uncertainty had sound economic theory and substantial empirical evidence to support it from the beginning, and a great deal of additional evidence has accumulated over the past three years. Yet critics have continued to dismiss it either as Republican bunk bought and paid for by Obama-hating billionaires or as a sort of 'just so' story concocted by flaky think-tank nobodies, such as yours truly. Now, however, the research reported by Baker, Bloom, and Davis knocks the ball firmly back into the critics’ court." (10/08/11)

http://bit.ly/q38IkG  

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Varieties of Austrian Price Theory: Rothbard Reviews Kirzner

September 28, 2011
posted by

Libertarian Papers
by Joseph T. Salerno  

"The root of any system of economic theory is the theory of price. But while modern Austrian economists have put a great deal of effort and ingenuity into building up the superstructure of their discipline since the mid-1970s, they have paid scant attention to ensuring that the price theory supporting the edifice is a sound and settled doctrine." [abstract -- full paper available as PDF or MS Word download] (09/27/11)

http://bit.ly/o6f3Mx  

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Austrian economics doesn’t have to be complicated

September 27, 2011
posted by

Adam Smith Institute Adam Smith Institute
by Henry Oliver  

"When presented with quotes by George Osborne and Vince Cable [from] 2009 that printing money was the last resort of desperate governments and 'Mugabe economics' Danny Alexander laughed it off. This is because people don’t really understand economics -- they see the headline figures, they associate recessions with whoever is in government; but as Ron Paul recently said, 'A lot of people just flat out don’t understand what I’m talking about.' But the Austrian explanation doesn’t have to be complicated." (09/27/11)

http://tinyurl.com/6kdplnr  

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Why monetarism?

August 28, 2011
posted by

Ayn R. Key
by Ayn R. Key  

"Although Monetarism, as an interventionist economic policy, clearly isn’t libertarian, people continue to consider it as such. The basic difference between Keynesian Economics and Monetarist Economics is that one favors fiscal policy while the other favors monetary policy as a way for the government to manage the economy through the manipulation of aggregate demand." (08/26/11)

http://aynrkey.blogspot.com/2011/08/why-monetarism.html  

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What happened to the mixed economy?

August 21, 2011
posted by

EconLog EconLog
by David Henderson  

"Open up any principles of economics textbook written between the 1950s and the early (and maybe even late) 1970s, and the odds are high that it will say that the United States has a mixed economy. One part of the mix, it will say, is free markets or capitalism. It's sometimes vague about the other part of the mix. ... But sometime in the 1980s, writers of economics textbooks -- and even many economists in popular articles -- lost some accuracy. They started saying that the U.S. has a free-market economy." (08/21/11)

http://econlog.econlib.org/archives/2011/08/what_happened_t_1.html  

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The confidence fairy vs. the animal spirits — not really a fair fight

August 4, 2011
posted by

Independent Institute Independent Institute
by Robert Higgs  

"The humor columnist for the New York Times, Paul Krugman, has recently taken to defending his vulgar Keynesianism against its critics by accusing them of making arguments that rely on the existence of a 'confidence fairy.' By this mockery, Krugman seeks to dismiss the critics as unscientific blockheads, in contrast to his own supreme status as a Nobel Prize-winning economic scientist. The irony in this dismissal, as others, including my friend Donald Boudreaux, have already pointed out, is that Krugman’s own vulgar Keynesianism relies on a much more ethereal explanatory force for its own account of macroeconomic fluctuations -- namely, the so-called animal spirits." (08/03/11)

http://bit.ly/qRtw7Z  

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Bloody Keynesians

August 2, 2011
posted by

Cafe Hayek Cafe Hayek
by Don Boudreaux  

"It’s as if a person who is bleeding to death because of a gunshot wound in his stomach is brought to a physician. The physician correctly realizes that the patient is losing massive amounts of blood and, also, correctly understands that such blood loss is dangerous to the patient’s health. So the physician prescribes massive infusions of blood, period If the patient doesn’t recover, the physician orders that the volume of blood-infusions be increased. If the patient dies, the physician will forever blame himself for not increasing the volume of blood-infusions even further." (08/01/11)

http://cafehayek.com/2011/08/bloody-keynesians.html  

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How wage rigidity is special

August 2, 2011
posted by

EconLog EconLog
by Bryan Caplan  

"Both nominal wages and nominal housing prices are what economists call 'downwardly inflexible.' In most markets, falling demand swiftly leads to falling prices, and surpluses don't last long. But in labor and housing markets, market adjustment to negative demand shocks is far more reluctant. There are plenty of regulations that exacerbate the problem, of course. But the main cause in both cases seems to be psychological." (08/02/11)

http://econlog.econlib.org/archives/2011/08/how_wage_rigidi.html  

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Keynes and anti-Keynes

July 20, 2011
posted by

EconLog EconLog
by Arnold Kling  

"What I call the textbook Keynesian model is one in which you think of everybody as working in a GDP factory, and the aggregate price of labor is fixed. (If you go to the graduate textbook model, you have prices that move, but too slowly, and it can have stickiness in output prices, not just the wage rate.) In terms of theoretical outlook, I would say that anyone who works with the GDP factory model and the textbook version of aggregate demand and aggregate supply is conducting the conversation in a way that is understandable to the Keynesian tradition. However, there are those on the far left and far right who do not like the GDP factory story and who see things as more complicated." (07/20/11)

http://econlog.econlib.org/archives/2011/07/keynes_and_anti.html  

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The critical flaw in Keynes’s system

July 18, 2011
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Robert P. Murphy  

"As part of my Mises Academy class Keynes, Krugman, and the Crisis, I have reread large portions of The General Theory. In his masterpiece, Keynes erects an impressive framework on one crucial assumption: left to its own devices, the free market can get stuck in an equilibrium with very high unemployment. Although Keynes's whole edifice and critique of the 'classical economists' rests on this belief, he devotes surprisingly little time to supporting it." (07/18/11)

http://mises.org/daily/5464/The-Critical-Flaw-in-Keyness-System  

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The trade deficit: Myth or catastophic reality?

July 14, 2011
posted by

Neal Reynolds Nuzcom
by Neal Reynolds  

"Free-market economists argue that there is no such thing as a trade deficit since all dollars spent overseas must eventually come back to purchase domestically produced goods and services, thus creating jobs in exchange for the ones that were lost due to the foreign purchases. But there is a huge exception to this rule that these economists overlook: The dollars that were sent overseas can instead be used to purchase our assets – assets which in many cases we didn't work for but inherited from the labors of previous generations ... or nature itself." (07/14/11)

http://tinyurl.com/62tldyy  

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ABA: Always Be Advising

July 5, 2011
posted by

EconLog EconLog
by Bryan Caplan  

"I often annoy other economists by giving advice. 'Economists are supposed to describe behavior, not change it,' they insist. But they couldn't be more wrong. Economics is inherently advisory. Anytime an economist notices a discrepancy between (a) the world as it is, and (b) the world as people believe it to be, economics implies advice." (07/05/11)

http://econlog.econlib.org/archives/2011/07/aba_always_be_a.html  

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The Chicago School versus the Austrian School

June 20, 2011
posted by

Ludwig von Mises Institute Ludwig von Mises Institute
by Robert P. Murphy  

"People often ask me, 'How are the Austrians different from the Chicago School economists? Aren't you all free-market guys who oppose big-government Keynesians?' In the present article I'll outline some of the main differences." (06/20/11)

http://tinyurl.com/4xge8c8  

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