Category: Economic Theory
The analysis published under this category are as follows.
Monday, February 08, 2010
Austrian Business Cycle Theory and Global Financial Crisis / Economics / Economic Theory
By: MISES
Ersan Bocutoglu and Aykut Ekinci write: Austrian business-cycle theory (ABCT) is capable of explaining the origin of the current global crisis. Therefore, ABCT provides Austrian economists with an advantageous position, compared to the other schools, in foreseeing this crisis. See, for example, Thornton (June 2004), Karlsson (November 2004), Shostak (August 2005).
Wednesday, February 03, 2010
Retail Sales Discount Offers Are the Language of Action, Not a Trick / Economics / Economic Theory
By: MISES
Predrag Rajsic writes: In the last several months, retail stores have sales on all sorts of products. Discounts go as far as 90% off. Some of these widespread price reductions can be attributed to the holiday season behind us, while most of them, it seems, were triggered by the recent fall in consumer demand due to the macroeconomic downturn.
Tuesday, January 26, 2010
The Nature of Socialism / Economics / Economic Theory
By: MISES
Mateusz Machaj writes: I first met Professor Hans-Hermann Hoppe in 2003, when he visited Poland for a libertarian conference. Most of the participants were interested in normative issues and political philosophy, whereas very few were interested in Austrian economics. Hence, I was coincidentally the only one to engage with Professor Hoppe in extensive discussions on theories of the Austrian School. I did not hesitate shamelessly to consume his time for the personal benefit of learning more about economics from one of Rothbard's most important followers. After this meeting, fortune continued to smile on me — it turned out that despite substantial geographical distance, I have enjoyed such productive conversations with my German mentor at least few times a year.
Monday, January 25, 2010
Illusions of the Age of Keynes / Economics / Economic Theory
By: Douglas_French
A year ago George Melloan wrote in the Wall Street Journal, "We're all Keynesian's Again." You remember last January — change was on its way. We had a new rock-star president and he was going to get us out of the mess that Wall Street had got us into. "Now is the time to jump-start job creation, restart lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down," President Obama told Congress. The new president has a worldview that is "all but in name Keynesian," Carl Horowitz wrote last spring.
Saturday, January 23, 2010
Morality and Economics, A Critical Review of Joseph E. Stiglitz's Writings / Economics / Economic Theory
By: John_Kozy
Joseph Eugene Stiglitz is an American economist and a professor at Columbia University who received the Nobel Memorial Prize in Economics in 2001 and the John Bates Clark Medal in 1979. He is one of the most frequently cited economists in the world and has served as a Senior Vice President and Chief Economist of the World Bank. He has been critical of the management of globalization, free-market economists, and the International Monetary Fund and the World Bank. He is the founder of the Initiative for Policy Dialogue, a think tank on international development based at Columbia University.
Thursday, January 21, 2010
The Religion of Socialism and the Profit of Reform / Politics / Economic Theory
By: Frank_Chodorov
There is this to be said in behalf of avowed and doctrinaire socialists, that their faith in the State is sublime. To them, the institution of political power is the unerring shepherd of the flock, the guide to the Good Society; it is also the antidote for all evil, the maker of abundance, the embodiment of justice, the sublimation of human aspirations. That they believe. To be sure, they affect an elaborate rationalism, something they call dialectical materialism, which in turn rests on a verbal agglomeration known as Marxian economics. Logic and fact without end have been applied to these notions to prove that they are only notions. But all this cerebration has turned out to be sheer waste of effort as far as influencing the true worshipers is concerned. They still believe. One cannot help but marvel at, and admire, their devotional integrity.
Wednesday, January 20, 2010
Krugman the Crazy Keynesian Does Not Have Clue / Economics / Economic Theory
By: William_Anderson
Even when Paul Krugman gets it right, he still gets it wrong. Now, I am not someone who is a knee-jerk critic of the guy, although I generally expect Krugman to blame the wrong people and recommend the wrong "solutions."
Tuesday, January 19, 2010
Academic Economists Serving their Political Masters / Politics / Economic Theory
By: Submissions
Frederick Sheehan writes: On January 14, 2010, an academic economist took a rare stance. Tenured professors rarely lift the veil from numbers that governments invent. In "Don't Like the Numbers? Change 'Em," Michael J. Boskin, Ph.D., formerly, an economics professor at Harvard and Yale; formerly, chairman of the Counsel of Economic Advisers in the George H.W. Bush administration; currently, T. M. Friedman Professor of Economics at Stanford University; research associate at the National Bureau of Economic Research; senior fellow at the Hoover Institution; and board member of the Exxon Mobil Corporation, Oracle Corporation and Vodafone PLC (among others), wielded his sword.
Tuesday, January 12, 2010
Free Banking versus Large-scale Credit Expansion / Economics / Economic Theory
By: MISES
Observations on the Discussions Concerning Free Banking
- The Banking School taught that an overissuance of banknotes is impossible if the bank limits its business to the granting of short-term loans. When the loan is paid back at maturity, the banknotes return to the bank and thus disappear from the market. However, this happens only if the bank restricts the amount of credits granted. (But even then it would not undo the effects of its previous credit expansion. It would merely add to it the effects of a later credit contraction.)
Monday, January 11, 2010
Does the Government Own the Whole Economy? / Economics / Economic Theory
By: Robert_Murphy
In a recent New York Times op-ed, economist Robert Shiller (coproducer of the famous housing-price index) recommended that the US government begin to sell claims on fractions of Gross Domestic Product. Besides the practical problems with his proposal, it rests on the premise that the US government owns the entire economy. It will be instructive to parse Shiller's column to see just how badly his collectivist thinking misleads him.
Thursday, January 07, 2010
Do Technological Innovations Cause Business Cycles? / Economics / Economic Theory
By: MISES
Malte Tobias Kähler writes: Agora — "market" — was the name for the public place in the center of ancient Hellenic cities. Spanish film director Alejandro Amenábar recently gave his new movie the same dignified title. It tells the story of Hypatia of Alexandria, a wise and proud woman, a teacher of philosophy and astronomy at the library of that old metropolis. During those times, the dominant model of the solar system was the Ptolemaic view, in which the earth is located in the centre, and the sun and all the planets surround it in circles.
Thursday, January 07, 2010
Keynes and Bernanke on Bubbles and Manias: Blame the Free Market / Economics / Economic Theory
By: Gary_North
In 1936, John Maynard Keynes' book appeared: The General Theory of Employment, Interest, and Money. It changed the world. It justified in the name of economic theory what governments had been doing since 1932: running deficits and creating fiat money. Keynes' ideas took over. Today, they are dominant. The 30-year break, 1978–2008 – Chicago School, rational expectations, efficient market theory – is over. Academic economists, like Dorothy in Kansas, ran for the Keynesian storm cellar. Unlike Dorothy, they made it. No trip to Oz for them!
Monday, January 04, 2010
Mature Capitalist Economies Trend Towards Stagnation Triggering Financial Innovations / Economics / Economic Theory
By: Mike_Whitney
British economist John Maynard Keynes, believed in capitalism, but he was also sharply critical of its structural flaws. He summed it up succinctly like this: "Our analysis shows... that long-run development is not inherent in the capitalist economy. Thus, specific 'development factors' are required to sustain a long-run upward movement."
Sunday, January 03, 2010
Fiscal Policy Cannot Stimulate the Economy, Redux / Economics / Economic Theory
By: MISES
Sterling T. Terrell writes: Fiscal policy, the attempt to use government outlays and revenue to better the economy, simply does not work either a priori or in practice.
Monday, December 28, 2009
The Most Redeeming Feature of Capitalism is Failure / Economics / Economic Theory
By: Mike_Shedlock
There is an interesting interview in Barron's with two hedge fund managers called Shorting the Economic Recovery.
The fund managers who correctly predicted the housing collapse and the rise in gold, now predict the economy's next leg down. The second theme in the article is on capitalism, fractional reserve lending and what the government should have done.
Friday, December 25, 2009
Does Economics Deserve a Nobel Prize? / Economics / Economic Theory
By: Global_Research
Michael Hudson writes: Reality & Relevance rather than "Purity" & Elegance are the Burning Issues in Economics Today.
It is bad enough that the field of psychology has for so long been a non-social science, viewing the motive forces of personality as deriving from internal psychic experiences rather than from man's interaction with his social setting. Similarly in the field of economics: since its "utilitarian" revolution about a century ago, this discipline has also abandoned its analysis of the objective world and its political, economic productive relations in favor of more introverted, utilitarian and welfare-oriented norms. Moral speculations concerning mathematical psychics have come to displace the once-social science of political economy.
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Friday, December 25, 2009
The Economic of Bethlehem, Remembering the Inn Keeper / Economics / Economic Theory
By: LewRockwell
At the heart of the Christmas story rests some important lessons concerning free enterprise, government, and the role of wealth in society.
Let’s begin with one of the most famous phrases: "There’s no room at the inn." This phrase is often invoked as if it were a cruel and heartless dismissal of the tired travelers Joseph and Mary. Many renditions of the story conjure up images of the couple going from inn to inn only to have the owner barking at them to go away and slamming the door.
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Wednesday, December 23, 2009
Bernanke's Flawed Understanding of Economic Theory / Economics / Economic Theory
By: Frank_Shostak
In his speech at the Economic Club in Washington, DC on December 7, the Fed chairman, Ben Bernanke, detailed his expectations of the future course of the US economy. Below, I comment on the various parts of Bernanke's speech.
Monday, December 21, 2009
Krugman Falls into the Keynesian National Income Accounting Trap / Economics / Economic Theory
By: Robert_Murphy
It's one thing to criticize Paul Krugman for his views on Austrian economics, but only a brave soul would have the temerity to question Krugman's discussion of the Keynesian approach to international trade, right? Since Krugman is the world's most famous living Keynesian, and he won the Nobel (Memorial) Prize for his work on trade theory, accusing him of a basic error on this score would be akin to telling Madonna she knows nothing of pop music.
Saturday, December 19, 2009
Academic Economists and Futurologists Make Worthless Forecasts 2010 / Economics / Economic Theory
By: Douglas_French
It's that time of the year. Not only are chestnuts roasting over an open fire and Jack Frost nipping at your nose, but whether you ask for it or not, those in the prediction business are rolling out their prognostications for 2010.