Category: Economic Theory
The analysis published under this category are as follows.
Friday, January 27, 2012
Is the United States in a Liquidity Trap? / Economics / Economic Theory
By: Frank_Shostak
If nothing else, we've learned that the liquidity trap is neither a figment of our imaginations nor something that only happens in Japan; it's a very real threat, and if and when it ends we should nonetheless be guarding against its return — which means that there's a very strong case both for a higher inflation target, and for aggressive policy when unemployment is high at low inflation.
Wednesday, January 25, 2012
Premature U.S. Dollar Obituaries, Mainstream Economist Lessons from Great Depression Not Learned / Economics / Economic Theory
By: Mike_Shedlock
A pair of articles by Austrian economist professor Antal E. Fekete just might have one wondering who is more in the loony bin, mainstream economists like Krugman or those consistently chanting about the death of the dollar coupled with hyperinflation.
Monday, January 16, 2012
Economic Crisis and the Theory of the Cycle / Economics / Economic Theory
By: MISES
Jesus Huerta de Soto writes: The three years that have passed since the world financial crisis and subsequent economic recession hit have provided Austrian economists with a golden opportunity to popularize their theory of the economic cycle and their dynamic analysis of social conditions. In my own case, I could never have imagined at the beginning of 1998, when the first edition of my book Money, Bank Credit, and Economic Cycles appeared, that 12 years later, due undoubtedly to a financial crisis and economic recession unparalleled in the world since the Great Depression of 1929, a crisis and recession which no other economic paradigm managed to predict and adequately explain, my book would be translated into 14 languages and published (so far) in nine countries and several editions (two in the United States and four in Spain).
Friday, December 30, 2011
Rising Systemic Risk and Multiple Black Swans, Gaping Chasm between Economics and Physics / Economics / Economic Theory
By: DK_Matai
Violation of the Laws of Physics?
Does today's dominant economic and financial thinking violate the laws of physics? Mainstream finance and economics have long been inconsistent with the underlying laws of thermodynamics, which are fast catching up as a result of globalisation. At present, economics is the study of how people transform nature to meet their needs and it treats the exploitation of finite natural resources including energy, water, air, arable land and oceans as externalities, which they are not. For example, we cannot pollute and damage natural ecosystems and their local communities ad infinitum without severe repercussions to their underlying sustainability. It is widely recognised both within the distinguished ATCA 5000 community across 120 countries and beyond that exchange rates instability, equity and commodity market speculation -- particularly fuel, food and finance -- and resultant volatilities as well as unsustainable levels of external debt are the main causes of asymmetric threats and disruption at the international level manifest as known unknowns, ie, low probability high impact risks and unknown unknowns or black swans.
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Tuesday, December 27, 2011
What Happened To Economic Growth? / Economics / Economic Theory
By: Andrew_McKillop
The magical invention of economic growth needs the magic of invention, and technological-type invention is always around and available the optimists tell us. When it isn’t, like now, doctoring the numbers and letting them doctor themselves with false overvalued monetary units "measuring" the growth that is not there will pass muster, the optimists don’t tell us. Doctoring growth that isn't also draws on productivity gains that aren't, using the same vastly overvalued money units that "measure" growth: for how many years have we had productivity gains (or claims) at 6% or more every year ? In plenty of national cases, simply inverting claimed productivity gains, and claimed rates of inflation, will give a much more honest picture of what is going on. This now longstanding and traditional doctoring of the data, both deliberate and inadvertent, extended over 10 and 15 years or more, gives us vastly different readouts for the real situation: which is bad.
Wednesday, December 07, 2011
Psychopathic Economics 101 / Politics / Economic Theory
By: D_Sherman_Okst
Psychopaths flew financial weapons of mass destruction (derivatives) into the twin towers of our economy, the housing market and the stock market. Ten trillion dollars of wealth imploded in a cloud of dust.
Ninety-nine percent of the economic experts – financial planners, economists, economic professors, brokers, and investors – missed the largest bubble in history as well as the systemic risk that the bubble posed.
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Wednesday, November 23, 2011
A Case for Free-Market Bank Regulation / Economics / Economic Theory
By: MISES
America (BAC) has rescinded its plan to charge customers a $5 monthly debit-card fee. Shall we praise bank regulators for their swift action in preventing the exorbitant charge? Well, no. Then we'll credit politicians for legislating against greedy, big-bank profiteering, right? Wrong again. The free market drove BAC to drop the debit-card fee.
Wednesday, November 23, 2011
Understand Everything Fundamentally, The entropic force is fundamental / Economics / Economic Theory
By: Shelby_H_Moore
Historic and recent scientific developments add to our understanding of how the entropic force from physics may govern everything in nature, including ecosystems and economics. This can be applied to fundamental analysis of potential political outcomes, macroeconomics, and paradigmatic epochal shifts, e.g. the current shift from the industrial to the knowledge age.
Friday, November 11, 2011
We Must Crush the Army of Krugmanites into Submission - Ambrose Evans-Pritchard, Nouriel Roubini, Martin Wolf / Politics / Economic Theory
By: Mike_Shedlock
Two days ago, Financial Times columnist Martin Wolf made an attempt at Thinking through the unthinkable. The "unthinkable" was the breakup of the Eurozone.
Reflections on the Easily Thinkable
For starters, a eurozone breakup is hardly unthinkable given that no currency union in history has ever survived in the absence of a fiscal union, and the Eurozone has no such fiscal union
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Friday, November 04, 2011
Is Debt Necessary for Economic Recovery? / Economics / Economic Theory
By: Robert_Murphy
Since the crisis began, one of the dominant themes in arguments over proper government policy has been the Keynesian view that it is crucial to prop up total spending. The added twist during this particular recession is the crushing burden of private-sector debt, which allegedly makes it all the more urgent for governments to run fiscal deficits.
Thursday, November 03, 2011
Look at the U.S. Postal Service and see the future of the Federal Government / Economics / Economic Theory
By: Gary_North
Niall Ferguson is my favorite Establishment analyst, because he is an historian who understands a lot about free markets. He writes for the literati. He starred in a PBS series that was worth viewing, and another is scheduled in 2012. He teaches at Harvard University and the Harvard Business School.
He thinks America is running an empire, and he thinks it will not survive much longer. As with all empires, it is going to run out of wealth to support it. So, when he wrote a piece for the Daily Beast, Newsweek, I read it.
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Monday, October 31, 2011
Is Economics Worthless Ideology? / Politics / Economic Theory
By: William_Anderson
In fêting the latest recipients of the Nobel Memorial Prize in Economic Science, Christopher Sims and Thomas Sargent, the New York Times editorializes that somehow this is a "victory" for empiricism over theory. Although the editors don't come right out and attack theory, they make their point clear by declaring that the latest award is a "challenge to politicians who are driven more by ideology than by serious consideration of the real-world consequences of their actions." In other words, any worldview that might be influenced by real-live economic theory that reflects human action must be wrong because Sims and Sargent won the Nobel.
Monday, October 24, 2011
Savings, The Paradox of Thrift Debunked / Economics / Economic Theory
By: Colin_Twiggs
Ever since John Maynard Keynes popularized the Paradox of Thrift, economists, central bankers and politicians have labored under the misapprehension that high levels of savings are bad for the economy and inhibit growth. The Paradox of Thrift simply states: Increased savings means there are less buyers for goods produced, so the nation as a whole will tend to produce less.
Sunday, October 23, 2011
Economic Growth Is Obsolete / Economics / Economic Theory
By: Andrew_McKillop
The last 'classic economic growth interval' can be almost exactly defined as the years 2004-2007.
After that, we enter a zone of permanent disaster for the late, unlamented by myself, Growth Economy which can only and does only operate in a series of boom-slump cycles. What we have now, since 2008 is however different: this slump is vastly greater than the nicely doctored official economic numbers can show. True numbers would not only be terrifying, but also hard to believe.
Thursday, October 20, 2011
Does The Economy Need a Referee? / Economics / Economic Theory
By: Jeff_Berwick
I recently appeared on Max Keiser’s "On The Edge" program. Unbeknownst to the viewer, we were having major communication problems. Max only could hear a small portion of what I said and I, likewise. But, right at the very end of the interview the communications worked again… that’s when the interview finally got interesting. Max stated that we “need a referee” in the economy. I replied, “I disagree. We don’t need a referee, I’m an anarchist…”
Thursday, October 20, 2011
Nouriel Roubini's Global Research Brand vs. His Prescription for the Economy / Economics / Economic Theory
By: Mike_Shedlock
Nouriel Roubini has called the economic crisis rather well. He gas gone on to turn success at RGE into an "economic brand". The Institutional Investor has an 8-page article on How Nouriel Roubini Became a Research Brand.
The article also notes that Roubini has been in the inner economic circles at the World Economic Forum at Davos, the Council on Foreign Relations, and the U.S. Congress.
Sunday, October 16, 2011
The Pitfall Of Rock Star Economists / Economics / Economic Theory
By: EconMatters
The whole idea of going to University and studying Economics, replete with a thorough understanding of the importance of analyzing economic data points seems to be lost on these Rock Star Economists who dominate the financial media landscape these days. The only barometer these so called economists utilize is: “Oh, the stock market has been selling off hard for two weeks we must be in a recession”!
Wednesday, October 12, 2011
How Economic Collapse Will Happen / Economics / Economic Theory
By: Videos
Discussion about how the coming economic collapse will happen, and how to prepare yourself.
First - Imports to the Country increase drastically and exports decrease.
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Tuesday, October 11, 2011
The Folly of Economic Forecasting / Economics / Economic Theory
By: Douglas_French
President Obama's mostly forgotten jobs package would reportedly create 1.9 million new jobs, a one-percentage-point drop in the unemployment rate, and goose GDP by two percentage points. That was the prediction of Mark Zandi, chief economist of Moody's Analytics. You see, he has a model. He did a simulation, and presto — 1.9 million jobs!
Thursday, October 06, 2011
Steve Jobs and the Beautification of Capitalism / Politics / Economic Theory
By: Jeffrey_A_Tucker
The day that Steve Jobs resigned from Apple, hosannas for his life's work and accomplishments erupted (and rightly) from every corner of the earth (or the blogosphere, in any case). He was universally hailed as a genius. He was praised for changing and upgrading our lives in so many ways. He was treated as an innovator who dedicated himself to the well-being of society, and accomplished miracles none of us mere mortals could have imagined. He did more than dream; he acted and created one of the great companies on the planet, a company that has enabled us to live out our own dreams.