Category: Economic Theory
The analysis published under this category are as follows.
Wednesday, August 24, 2016
Proof Positive the Economic Recovery Is a Myth / Economics / Economic Theory
By: Graham_Summers
For years, I’ve been warning that all claims of economic “recovery” in the US are complete fiction.
We now have definitive proof in the form of tax receipts.
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Friday, August 19, 2016
Big Policies, Bigger Failures / Economics / Economic Theory
By: Peter_Schiff
Economics is far simpler than most in academics or government would have you believe. To make accurate predictions all you really need is an honest appreciation of the self-interest that is at the heart of free market transactions and an ability to understand how regulations that attempt to "correct" these realities don't work. This is certainly the case with the completely predictable slow-motion train wrecks that are the signature U.S. domestic policy experiments of the last eight years: Obamacare and Federal Reserve stimulus. From the start, I issued countless commentaries on why both would fail spectacularly. The jury has started to come back on Obamacare, and the results are a disaster. And while the verdict on the Fed's policies has yet to arrive in similarly stark terms, I believe that its failure is just as certain.
Friday, August 12, 2016
How the Frankfurt School Changed American Culture / Economics / Economic Theory
By: David_Galland
Dear Parade-Goer,
How many times have you heard someone lament how much the world has changed from the good old days? You know, the simpler pre-PC period when the world operated according to fairly predictable principles.
But then we woke one day in a world with every bastion of what some might called normalcy under attack. Institutions that 100 years ago appeared unassailable—marriage, for example—are increasingly seen as antiquated. Even the idea of a national character is viewed as wrong-minded and, in the successful societies of the West, as exclusionary and even racist.
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Monday, June 13, 2016
Keynesian Economics Versus Austrian Economics - Video / Economics / Economic Theory
By: Mario_Innecco
hi it's monday jun 13 2016
home of alternative economics and contrarian views
this morning I want to talk about the difference between the cannes in school
of economics and the Austrian School of Economics because you might be thinking
what is alternative economics and in my view that's what alternative economics
is today is the Austrian School of Economics Austrian School of Economics
is based on the studies of Austrian scholars from the 19th century and it
was followed through by economist's like ludwig von mises Africa
friedrich hayek Murray Rothbard from the US and yeah that's the are strange
school that the proponents of the Austrian school usually while not
usually the proposer ask our school argue that economics is not a science
economics is based on human action and of course human action is not predictable
Tuesday, May 03, 2016
Just Look to the Middle-Class for Proof of Trickle-Down Economics / Economics / Economic Theory
By: Harry_Dent
Politicians and economists get many things wrong, but right now, the one thing that really gets up my… let’s keep this clean and just say, nose… is how clueless they are about “trickle-down economics.”
Republicans believe it. (They just don’t realize how long it takes and that it isn’t happening yet from the information revolution.)
Wednesday, March 30, 2016
Price Controls May Be On the Way / Economics / Economic Theory
By: MISES
Paul-Martin Foss writes: If you thought negative interest rates were as bad as it could get with central banks, you might be in for a surprise. Central banks have been so spectacularly unsuccessful with their accommodative monetary policies that they are discussing pulling out all the stops to get the results they want. They fail to realize that the reason prices aren’t rising is because they really want and need to fall. Bad debts weren’t liquidated during the last financial crisis, the debtors were merely bailed out. Overpriced assets weren’t allowed to be reduced in price. Central banks pumped trillions of dollars into the economy to attempt to paper over the recession. Market forces want to drive prices down, while central banks attempt to prop them up. So what to do when central banks aren’t getting their way?
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Monday, March 21, 2016
Unemployment vs Inflation - May the Phillips Curve Rest in Peace / Economics / Economic Theory
By: Michael_Pento
In 1958, economist William Phillips claimed there was a historical inverse relationship between the rate of unemployment and the corresponding rate of inflation. His conclusion was that full employment (whatever that means) was inflationary. He illustrated his claim through a chart referred to as the Phillips Curve.
Monday, March 07, 2016
Free Trade Is the Path to Prosperity / Economics / Economic Theory
By: MISES
Georgi Vuldzhev writes: The political circus of the 2016 presidential election has revived and reinvigorated popular belief in age-old protectionist fallacies. Currently both Donald Trump and Bernie Sanders, are both in favor of expanding protectionist trade policy, with both of them arguing that free trade “destroys” jobs and hurts domestic workers and producers by exposing them to foreign competition. Both candidates espouse an utterly misguided zero-sum view of economics, in which one side to an exchange wins only when the other side loses. Both men are, of course, completely wrong.
Thursday, February 04, 2016
TPP is Economic Warfare, Trade Can Make Everyone Worse Off / Governments are Stupid / Economics / Economic Theory
By: Dylan_Waller
Professor Yoram Baumun’s comedic retake of the Principles of Economics appropriately translates “Trade can make everyone better off” to “Trade can make everyone worse off.” Moreover, he translates “Market are usually a good way to organize economic activity” to “Governments are Stupid”.
Monday, December 14, 2015
Why Gold-Backed Money Doesn’t Bring Economic Booms and Busts / Commodities / Economic Theory
By: Frank_Shostak
According to popular thinking, not every increase in the supply of money will have an effect on economic activity. For instance, if an increase in supply is matched by a corresponding increase in the demand for money, we are told, then there won’t be any effect on the economy. The increase in the supply of money is neutralized, so to speak, by an increase in the demand for money, or the willingness to hold a greater amount of money than before.
What do we mean by demand for money? And how does this demand differ from demand for goods and services?
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Friday, November 27, 2015
Economics Is About Scarcity, Property, and Relationships / Economics / Economic Theory
By: MISES
Michael J. McKay writes: The other day I was having coffee with a new friend, a retired businessman who had customized luxury cars in California. I mentioned I had recently retired from owning an investment firm and had studied economics for many years, especially Austrian economics.
Like so many people, he said, “I really don't understand economics and always have been confused by it.”
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Thursday, October 29, 2015
The Financialization of the Economy / Economics / Economic Theory
By: John_Mauldin
Roger Bootle once wrote:
The whole of economic life is a mixture of creative and distributive activities. Some of what we ‘‘earn’’ derives from what is created out of nothing and adds to the total available for all to enjoy. But some of it merely takes what would otherwise be available to others and therefore comes at their expense.
Successful societies maximise the creative and minimise the distributive. Societies where everyone can achieve gains only at the expense of others are by definition impoverished. They are also usually intensely violent….
Much of what goes on in financial markets belongs at the distributive end. The gains to one party reflect the losses to another, and the fees and charges racked up are paid by Joe Public, since even if he is not directly involved in the deals, he is indirectly through costs and charges for goods and services.
The genius of the great speculative investors is to see what others do not, or to see it earlier. This is a skill. But so is the ability to stand on tip toe, balancing on one leg, while holding a pot of tea above your head, without spillage. But I am not convinced of the social worth of such a skill.
This distinction between creative and distributive goes some way to explain why the financial sector has become so big in relation to gross domestic product – and why those working in it get paid so much.
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Wednesday, October 21, 2015
Why Star Trek Is Wrong: There Will Always Be Scarcity / Economics / Economic Theory
By: MISES
Jonathan Newman writes: With the recent successes and announcements of sci-fi movies and TV shows like The Martian, Interstellar, and new incarnations of Star Trek and Star Wars, no one can deny that we crave futurism and stretching our imagination on what advanced technology can accomplish. Many look to the example of these fictional worlds as an indication of what life might be like when technology can provide for all of our basic needs, a condition some call “post-scarcity.”
Thursday, September 10, 2015
Confusions About Interest Rates Part 2 / Interest-Rates / Economic Theory
By: Frank_Hollenbeck
Following the 2001 dot-com crisis, interest rates were lowered to 1% and then slowly raised to 5% over a 4-year period. This timid policy still created a massive bubble in housing that finally bust in 2008. Instead of learning from the past, we doubled down on this same failed policy. Interest rates were then lowered to 0% and have been held there with little political will to raise them one iota.
We are now on the eve of another major financial crisis, yet economists (except Austrians) still don’t really understand the role played by interest rates in a capitalist economy. To avoid repeating economic mistakes of the past, we must understand the faulty logic that led us to these errors.
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Thursday, September 10, 2015
Confusion About Interest Rates Part 1 / Interest-Rates / Economic Theory
By: Frank_Hollenbeck
Since 2008, central banks have rushed to lower interest rates to spur growth. This has induced mal-investments in almost all asset classes. For example, with oil prices below $50 a barrel and trending lower, the shale oil industry is in serious trouble as is the banking industry that lent it over $1 trillion.
Of course, economists and faulty economic theory are 100% responsible for what is to come. The professional economist today is like the doctor of the past whose prescription to bleed the patient was considered state-of-the-art medicine; the cure, of course, being much worse than the disease.
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Tuesday, September 01, 2015
Weapons of Economic Destruction / Economics / Economic Theory
By: John_Mauldin
“Measurement theory shows that strong assumptions are required for certain statistics to provide meaningful information about reality. Measurement theory encourages people to think about the meaning of their data. It encourages critical assessment of the assumptions behind the analysis.
Sunday, August 23, 2015
Economics is Dead, and Economists Killed It / Economics / Economic Theory
By: MISES
Per L. Bylund writes: What we have seen over the course of the last eighty years is a systematic dismantling of the contribution of economics to our understanding of the social world. Whatever the cause, modern economics is now not much more than formal modeling using mathematics dressed up in economics-sounding lingo. In this sense, economics is dead as a science, assuming it was ever alive. Economics in mathematical form cannot fulfill its promises and neither the scientific literature nor advanced education in the subject provide insights that are applicable to or useful in everyday life, business, or policy.
Wednesday, August 12, 2015
Closing the Sausage Factory - The New Normal / Economics / Economic Theory
By: John_Mauldin
“Bureaucracy destroys initiative. There is little that bureaucrats hate more than innovation, especially innovation that produces better results than the old routines. Improvements always make those at the top of the heap look inept. Who enjoys appearing inept?”
– Frank Herbert, Heretics of Dune
“Economies naturally grow. People innovate as they go through life. They also look around at what others are doing and adopt better practices or tools. They invest, accumulating financial, human and physical capital.
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Tuesday, July 21, 2015
Worker Productivity and Modern-Day Horse Manure / Economics / Economic Theory
By: John_Mauldin
“They just use your mind and they never give you credit. It’s enough to drive you crazy if you let it.”
Almost everyone wants to be more productive. I include myself in that group – there are lots of ways I could be more productive. When I have conversations with people I think are very productive, they almost always tell me they wish they were more productive. What more could anyone expect from them?
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Friday, July 10, 2015
Labour Productivity Misconceptions / Economics / Economic Theory
By: Alasdair_Macleod
In the media warm-up for Wednesday's UK budget, we were told of Britain's poor productivity and Chancellor Osborne subsequently confirmed that his priority is to address it. Comparative figures for Europe quoted by the BBC were sourced from the OECD and are replicated in the chart below.