Category: Economic Theory
The analysis published under this category are as follows.
Thursday, August 19, 2010
Economists Are Behind the Curve of Economic Realities! / Economics / Economic Theory
By: Sy_Harding
Concerns about the U.S. economy began as a ripple when economic growth unexpectedly began slowing in the 2nd quarter. The continuing waves of negative economic reports in May, June, July, and now into August have had economists scrambling to revise their growth forecasts downward. But they have not been quick enough to keep up with the downward pace of the reports.
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Wednesday, August 18, 2010
Affording the Unemployed / Economics / Economic Theory
By: J_M_Finegold_Catalan
While the unemployment rate continues to hover between 9 and 10 percent, the average amount of time wage earners remain unemployed has skyrocketed to previously unrecorded levels.[1] Keynesians fear that a weak fiscal and monetary response will allow the presently cyclically unemployed to become so permanently.[2] UC Berkeley professor Bradford DeLong puts it briefly, "Long-term unemployment has a way of turning into structural unemployment."[3]
Wednesday, August 18, 2010
Peter Schiff Says Dr. Keynes Killed the Patient / Economics / Economic Theory
By: Peter_Schiff
A morbidly obese gentleman labored into Dr. Hayek's office suffering from severe chest pain. The patient also complained that he was unable to consume his usual 10,000 calorie-per-day diet; in fact, he was feeling so sick that he could barely scarf down 9,000 calories. He plead that his love for food remained as strong as ever, but his body just wasn't keeping up with his demands.
Monday, August 16, 2010
The Outsourcing Circle of the Global Economy / Economics / Economic Theory
By: Akhil_Khanna
A lot has been written, over the years, about the benefits of outsourcing and its effects on the profitability of the global corporations.
This article aims to draw attention towards the Long Term effects of outsourcing to the same corporations doing so.
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Friday, August 13, 2010
Inflation and Deflation, The Flations Moving Towards a Chaotic Conclusion / Economics / Economic Theory
By: Fred_Sheehan
The incessant debate of whether the economy is inflating or deflating suffers from a vocabulary problem. This is as it must be since some (Federal Reserve Chairman Ben S. Bernanke) discuss deflation as falling prices of stuff while others concentrate on the debt deflation of an overleveraged economy. The latter is what matters.
Tuesday, August 10, 2010
The Deflation Bogey / Economics / Economic Theory
By: William_Anderson
The Paul Reveres of the economics profession are riding their horses, warning Americans, "Deflation is coming! Deflation is coming!" From Paul Krugman to Joseph Gagnon to the various mainstream news publications, the message is the same — the government needs to induce inflation now, or else the economy will sink further into the Slew of Despond and unemployment will increase.
Monday, August 09, 2010
The Form of Saving Matters For Free-market Fractional Reserve Banking / Economics / Economic Theory
By: Robert_Murphy
Although Austrian economists agree on most of the "big picture" issues, even so there are some internal controversies. One of the most heated debates within the Austrian camp centers on the economic benefits (or lack thereof) of the practice of fractional-reserve banking. Just about every Austrian today thinks that our current financial system — cartelized and propped up by the government — is prone to excessive inflation and the boom-bust cycle.
Friday, August 06, 2010
The Austrian History of U.S. Money and Banking / Economics / Economic Theory
By: MISES
Jonathan Finegold Catalán writes: Traditionally, the greatest and most complete history of American money is held to be Milton Friedman and Anna Schwartz's A Monetary History of the United States, 1867–1960. As a reservoir of statistics, Friedman and Schwartz's magnum opus is unrivaled. In terms of influence, there is no other book on the subject held in higher regard. Friedman and Schwartz challenge the conventional wisdom on American economic history, on the topics of the so-called Long Depression — a period which saw steadily falling prices, but unrivaled industrial growth — and the "dangers" of secular price deflation,[1] and the Great Depression.[2] But their empirical and positivist approach to economic analysis often mars their accuracy.[3]
Friday, August 06, 2010
The Inflation and Deflation Debate Deconstructed / Economics / Economic Theory
By: Jesse
'What most people call reason is really rationalization. Given a new set of data, most people will search through it only for those examples that support their existing beliefs. Their beliefs are really opinions, a tenuous collection of myths, anecdotes, slogans, and prejudices based largely on justifying personal fear and greed. This is what makes modern propaganda so powerful; people do not bother to think critically and objectively and act for the greatest good. And in their ignorance they can find the will to do increasingly monstrous things, and rationalize them.' Jesse
Thursday, August 05, 2010
Linguistic Nonsense and Liberal Economics / Economics / Economic Theory
By: John_Kozy
Liberal economics has long been recognized by a host of writers, some of whom are economists themselves, as a religious-like dogma. Like Tertullian who believed "because it is absurd," economists accept the dogma not because it makes sense, but because it doesn't.
Whoa, you say, show me the evidence, and I will.
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Monday, August 02, 2010
Nonsense on the Federal Budget Deficit Question / Economics / Economic Theory
By: Robert_Murphy
In a recent piece I reported the shocking ignorance in a Huffington Post article on the alleged harmlessness of the federal deficit. Several readers wrote to tell me that as bad as the HuffPo article was, James Galbraith's interview with Ezra Klein was even worse.
They were right. In today's piece I'll walk through some of Galbraith's biggest whoppers.
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Saturday, July 31, 2010
Nielson: The End Game is Either Hyperinflation or Debt Implosion – Got Gold? / Economics / Economic Theory
By: Lorimer_Wilson
“The collapse of the U.S. economy is a certainty - only the manner in which it will happen has yet to be determined. It is just a matter of time before the global derivatives bubble will produce the same result that has occurred to every other currency not backed by gold throughout history - those currencies, our ‘money’, will become worthless.”
Saturday, July 31, 2010
Federal Government's Trillion Dollar Deficits Crowding Out Our Future Wealth / Economics / Economic Theory
By: Gary_North
The standard justification for the Federal government's trillion-dollar-plus deficits for the next decade is this: "Without this stimulus, the economy will fall into another Great Depression." This is the Keynesian Party Line, all over the West. It is promoted by almost everyone. Even normally free market economists have gotten on board.
Friday, July 30, 2010
The History of Capitalism / Economics / Economic Theory
By: MISES
The history of capitalism as it has operated in the last two hundred years in the realm of Western civilization is the record of a steady rise in the wage earners' standard of living. The inherent mark of capitalism is that it is mass production for mass consumption directed by the most energetic and far-sighted individuals, unflaggingly aiming at improvement. Its driving force is the profit motive, the instrumentality of which forces the businessman constantly to provide the consumers with more, better, and cheaper amenities. An excess of profits over losses can appear only in a progressing economy and only to the extent to which the masses' standard of living improves. Thus capitalism is the system under which the keenest and most agile minds are driven to promote to the best of their abilities the welfare of the laggard many.
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Friday, July 30, 2010
Has Economics Run Out of Ideas? / Economics / Economic Theory
By: Andrew_Butter
Jonathan Finegold Catalan provides an excellent review of the current state of intellectual paralysis in the economics profession: http://www.marketoracle.co.uk/Article21501.html
He describes how right-now the debate hinges on re-examination and re-hashing of the ideas of the two legends of economic thinking, John Maynard Keynes and Mises-Hayek (the Austrian School).
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Thursday, July 29, 2010
Austrian Business Cycle Theory Vs Keynesians / Economics / Economic Theory
By: J_M_Finegold_Catalan
The current recession has brought back discussion on the merits of countercyclical fiscal and monetary policy. Broadly speaking, the economics profession is divided into two camps. One side is made up of "liquidationists" and "deficit hawks," supporting tight monetary policy and low — or no — government spending. The other group is composed of those fearing a fall in prices, who support easy credit and expansive fiscal policy to combat it. While most economists probably fall in between, this dichotomy represents the two poles. The extremes are occupied by the Austrian School on one end and Paul Krugman on (or close enough to) the other.
Tuesday, July 27, 2010
The Unlimited Power of Suppressing the Interest Rate / Interest-Rates / Economic Theory
By: Thorsten_Polleit
Under today's fiat-money regimes, central banks, as a rule, control short-term interest rates. They do so by setting the interest rates on short-term loans extended to commercial banks (typically with maturities of one day, one week, two weeks, or one month).
Sunday, July 25, 2010
Credit Based on Consumption Not Savings, Real Bills Revisted / Economics / Economic Theory
By: Professor_Emeritus
Adam Smith in his Wealth of Nations worked out the foundations of a second type of credit that is based, not on savings, but on consumption. Later this theory was pejoratively called "Real Bills Doctrine" by its detractors. We stick to this name because the adjective "real" admirably captures the essence of a bill of exchange, making it different from anticipation bills, accommodation bills, treasury bills, which all have a measure of being "unreal".
Sunday, July 25, 2010
Thoughts on the Economy / Economics / Economic Theory
By: Pravda
Marcus Eduardo de Oliveira writes: "… the ideas of Economists and political philosophers, BOTH right when they are and when they are wrong, are more powerful than is commonly understood." -John Maynard Keynes
Nobody can ignore the economy for only two reasons: the first is that not enough resources for everyone, since desires are unlimited. The shortage, understood as market failure, is an incontestable truth. The second reason is that we are all part of the economy. The latest issues involving the economy also involve us in every moment. Thus, regardless of the evolutionary stage of each company, we always affect situations involving the generation of employment, income, combating poverty, hunger, resource transfers, taxation, purchase and sale of goods.
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Thursday, July 22, 2010
The Death of the Postindustrial Dream / Politics / Economic Theory
By: Ian_Fletcher
Remember postindustrialism? Not long ago, this catchphrase was supposed to define America’s future: no more grubby hard industries, just a clean bright world of services and high technology. Its most succinct formulation is as follows:
Manufacturing is old hat and America is moving on to better things.