Category: Economic Theory
The analysis published under this category are as follows.
Friday, July 16, 2010
Economics in Freefall / Economics / Economic Theory
By: Paul_Craig_Roberts
I admire Joseph E. Stiglitz, because he has a social conscience and a sense of justice, the absence of which turns economists into monsters. Despite his virtues and Nobel Prize, Stiglitz sometimes falls down as an economist. Readers of my new book, How The Economy Was Lost, will be aware that I take him to task for the Solow-Stiglitz production function, which seriously misleads economics about the scarcity of nature’s capital.
Wednesday, July 14, 2010
Economics Is Easy Except for Academic Economists / Economics / Economic Theory
By: MISES
Sterling T. Terrell writes: I stumbled across an interesting article a few days ago. Written by Kartik Athreya, of the Federal Reserve Bank of Richmond, the article is titled "Economics is Hard. Don't Let Bloggers Tell You Otherwise."
Tuesday, July 13, 2010
The Self-Defeat of the Keynesian Cross / Economics / Economic Theory
By: MISES
Predrag Rajsic writes: The Austrian business-cycle theory, initiated by Ludwig von Mises and further developed and elaborated by F.A. Hayek, is by many considered the cornerstone of this school of thought. However, in 1998, Paul Krugman plainly dismissed the theory as not "worthy of serious study."
Wednesday, July 07, 2010
Ten Economic Blunders from History / Economics / Economic Theory
By: MISES
John S. Chamberlain writes: Take cover when you hear a political leader talking about economic affairs. You can bet a bad decision is incoming. Luckily for the leaders, their meddling usually has a slow, erosive effect on the economy. Every so often, however, the great ones manage to land a real whopper that takes them down along with their whole country. Here are ten examples from history.
Wednesday, July 07, 2010
Beyond Black Swans, De-Leveraging And Re-Leveraging / Economics / Economic Theory
By: Gary_North
The black swan is the foo bird of modern Keynesianism. It is a threat only because of central bank fiat money and commercial bank leverage.
In a recent report, "China: What Rhymes with 'Crash'?" I wrote this:
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Tuesday, July 06, 2010
Economists Gathering Data Whilst Economy Burns / Politics / Economic Theory
By: MISES
Mark R. Crovelli writes: When future generations of scholars look back on the economic and political disaster enveloping the United States today, three questions should be at the forefront of their minds.
First, they should wonder whether the many generations of politicians that collectively engineered this economic and political disaster were either (1) too outrageously stupid to know that what they were doing would produce such a dreadful catastrophe, or (2) whether they were so evil and underhanded that they did know what they were doing would result in disaster — and yet they did it anyway.
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Wednesday, June 30, 2010
Defending the Slum Landlord / Housing-Market / Economic Theory
By: MISES
Walter Block writes: To many people, the slumlord — alias ghetto landlord and rent gouger — is proof that man can, while still alive, attain a satanic image. Recipient of vile curses, pincushion for needle-bearing tenants with a penchant for voodoo, perceived as exploiter of the downtrodden, the slumlord is surely one of the most hated figures of the day.
Wednesday, June 30, 2010
How Economic Policy Errors Cause Depressions / Economics / Economic Theory
By: Mike_Shedlock
It is easy to pick on Paul Krugman. So easy in fact, that it is not even fair sport.
However, if you can separate the wheat from the chaff, sometimes there are nuggets of truth in what Krugman writes.
Wednesday, June 30, 2010
Economic Choice Between Austrian Austerity Or Keynesian Poverty / Economics / Economic Theory
By: LewRockwell
Sean Corrigan writes: [Government] is apprehended, not as a committee of citizens chosen to carry on the communal business of the whole population, but as a separate and autonomous corporation, mainly devoted to exploiting the population for the benefit of its own members… The intelligent man, when he pays taxes, certainly does not feel he is making a prudent investment of his money; on the contrary, he feels he is being mulcted in an excessive amount for services that, in the main, are useless to him, and that, in substantial part, are downright inimical to him" ~ H.L. Mencken, "More of the Same," American Mercury 1925
Tuesday, June 29, 2010
Keynesian Economics C + I + G = Baloney / Economics / Economic Theory
By: MISES
Patrick Barron writes: Wrongheaded governmental interventions are preventing the world's largest economies from recovering from massive malinvestment.
Japan, currently the world's third-largest economy, has had zero growth for 20 years. A good case can be made that the United States has had zero growth for ten years, because the so-called growth of the first decade of the new millennium now appears to have been phony. All of those houses were built at a loss, losses that we are only now recognizing. We have yet to plumb the total extent of the rot.
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Tuesday, June 29, 2010
Paul Krugman Warns of Depression / Economics / Economic Theory
By: William_Anderson
The more I read Paul Krugman's columns and papers, the more I realize just how great the gulf is between Austrian and Keynesian thought. It is impossible to sum up all of the differences between the two camps, but I do think that perhaps the disparities can be summed up in the Austrian rejection of Keynes' famous 1943 statement that expansion of credit by the central bank will create a "miracle . . . of turning a stone into bread."
Monday, June 28, 2010
How do Other Nations Balance Their Trade? Try Germany / Economics / Economic Theory
By: Ian_Fletcher
As America continues to contemplate its trade mess, the question naturally arises how other developed nations manage to trade with the world without deficits and without turning high-wage industries into low-wage industries to compete. Although some other developed nations, like Britain and Spain, have trade situations almost as bad as ours in recent years, some have been quite the opposite. Read full article... Read full article...
Monday, June 28, 2010
The New Ideological Divide Between Stimulators and Austereians / Economics / Economic Theory
By: Peter_Schiff
Despite the apparent deficit-cutting solidarity that emerged from this weekend's G-20 meeting in Toronto, it is clear that the great powers of the industrialized world have not been this philosophically estranged since the end of the Cold War. Ironically, in this new contest, the former belligerents have switched sides - the capitalists are now the socialists, and vice versa.
Monday, June 28, 2010
More Keynesian Clowns With Priming the Economic Pump Nonsense / Economics / Economic Theory
By: Mike_Shedlock
Nearly every day, more Keynesian and Monetarist clowns show up trumpeting the benefits of more government spending and more financial debt.
Tuesday, June 22, 2010
Money vs Wealth / Economics / Economic Theory
By: Robert_Murphy
When discussing financial matters, people often conflate money with wealth. Although such loose language may be perfectly fine in everyday conversation, it's important to occasionally go over the basics and make sure we are thinking about these issues in the proper way.
Tuesday, June 22, 2010
What's the Point of Macro Events Research in Forecasting? / Economics / Economic Theory
By: John_Mauldin
I am back in Tuscany and will head to Milan tomorrow early, give a speech at the Bloomberg offices and then back home. But it is Monday and that means it is time for another Outside the Box. And I have found a most excellent offering. Dylan Grice from Societe Generale in London wrote on value for an OTB a few weeks ago, and he follows that up with more thoughts on the use of macro trends versus value investing. This is a real think piece, and worthy of more than one read.
Saturday, June 19, 2010
Economic Depression Solutions, Krugman vs. Greenspan / Economics / Economic Theory
By: Mike_Shedlock
Courtesy of Calculated Risk here are a pair of articles, one from Krugman and another from Greenspan on the limits of debt.
That ’30s Feeling
Friday, June 18, 2010
Trade Cycle Impact on the Market Economy / Economics / Economic Theory
By: MISES
The popularity of inflation and credit expansion, the ultimate source of the repeated attempts to render people prosperous by credit expansion, and thus the cause of the cyclical fluctuations of business, manifests itself clearly in the customary terminology. The boom is called good business, prosperity, and upswing. Its unavoidable aftermath, the readjustment of conditions to the real data of the market, is called crisis, slump, bad business, depression. People rebel against the insight that the disturbing element is to be seen in the malinvestment and the overconsumption of the boom period and that such an artificially induced boom is doomed. They are looking for the philosophers' stone to make it last.
Thursday, June 17, 2010
The Crisis of Capitalism; Why the Socialists are Wrong / Politics / Economic Theory
By: David_Knox_Barker
Clearly international free market capitalism is the midst of the greatest long wave debt crisis in history; including government, corporate and personal debt. Overcapacity plagues virtually every industry around the globe from Taipei to Toledo to Timbuktu. Debt, overcapacity, and their impact on market prices are the key long wave winter season trends that have yet to run their course. The world now faces the final years of this long wave decline and winter season that will deliver global economic and financial upheaval until 2012.
Friday, June 11, 2010
The Monetary or Circulation-Credit Theory of the Trade Cycle / Economics / Economic Theory
By: MISES
The theory of the cyclical fluctuations of business as elaborated by the British Currency School was in two respects unsatisfactory.
First, it failed to recognize that circulation credit can be granted not only by the issue of banknotes in excess of the banks' holding of cash reserves, but also by creating bank deposits subject to check in excess of such reserves (checkbook money, deposit currency). Consequently it did not realize that deposits payable on demand can also be used as a device of credit expansion. This error is of little weight, as it can be easily amended. It is enough to stress the point that all that refers to credit expansion is valid for all varieties of credit expansion no matter whether the additional fiduciary media are banknotes or deposits.
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