Category: Economic Theory
The analysis published under this category are as follows.
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.
Thursday, December 17, 2009
Austrian Economists WIn, Keynesians and Friedmanians the Big Intellectual Losers / Economics / Economic Theory
By: Gary_North
Niall Ferguson is an academic hotshot. He is a professor at both Harvard University and the Harvard Business School. This is unique. He is both an economist and an historian. This is rare. He writes very well. He writes widely respected books and very readable articles.
He is also on target about what happened to the American economy in 2009. This is simply astounding.
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Thursday, December 10, 2009
Leave Free Markets to Themselves, Nothing Else Will Work / Economics / Economic Theory
By: Don_Cooper
A market is the voluntary coming together of two groups of people: those that have something to sell and those that want to buy what is being sold at the price it is being offered. The former group is called producers and the latter consumers.
Wednesday, December 09, 2009
Government Socialist Intervention and the Distortion of Capital / Economics / Economic Theory
By: Frederic_Bastiat
In all times, but more especially of late years, attempts have been made to extend wealth by the extension of credit.
I believe it is no exaggeration to say, that since the revolution of February, the Parisian presses have issued more than 10,000 pamphlets, crying up this solution of the social problem.
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Tuesday, December 08, 2009
Productive Debt versus Unproductive Debt / Economics / Economic Theory
By: Douglas_French
The credit crunch continues, with businesses large and small finding that their bankers remain exceedingly stingy in the wake of the 2008 financial debacle. "We need to see banks making more loans to their business customers," Federal Deposit Insurance Corporation (FDIC) Chairwoman Sheila Bair told reporters recently after the FDIC released figures showing that the amount of loans outstanding in the nation's banks fell $210.4 billion in the third quarter of 2008. That is the largest quarterly decline since the FDIC began tracking loans in 1984.
Monday, December 07, 2009
Guide to Keynes's Dangerous and Destructive Economic Theory / Economics / Economic Theory
By: David_Gordon
Defenders of Keynes, such as the recent convert Bruce Bartlett, often claim that he supported capitalism. (Bartlett's The New American Economy has this as a primary theme.) His interventionist measures had as their aim not the replacement of capitalism by socialism or fascism. Rather, it is alleged, Keynes aimed to save the existing order.
Thursday, December 03, 2009
How Progressive Capitalism Conquers Mass Poverty / Economics / Economic Theory
By: Henry_Hazlitt
Throughout history, until about the middle of the 18th century, mass poverty was nearly everywhere the normal condition of man. Then capital accumulation and a series of major inventions ushered in the Industrial Revolution. In spite of occasional setbacks, economic progress became accelerative. Today, in the United States, in Canada, in nearly all of Europe, in Australia, New Zealand, and Japan, mass poverty has been practically eliminated. It has either been conquered or is in process of being conquered by a progressive capitalism. Mass poverty is still found in most of Latin America, most of Asia, and most of Africa.
Thursday, December 03, 2009
A Guide to Keynes's Dangerous and Destructive Economics / Economics / Economic Theory
By: David_Gordon
Where Keynes Went Wrong And Why Governments Keep Creating Inflation, Bubbles, and Busts. By Hunter Lewis. Axios Press, 2009. Vi + 384 pages.
Tuesday, December 01, 2009
Economics vs. Politics / Politics / Economic Theory
By: Frank_Chodorov
It may be that wary beasts of the forest come around to accepting the hunter's trap as a necessary concomitant of foraging for food. At any rate, the presumably rational human animal has become so inured to political interventions that he cannot think of the making of a living without them; in all his economic calculations his first consideration is, what is the law in the matter? Or, more likely, how can I make use of the law to improve my lot in life?
Monday, November 30, 2009
Housing Market Boom and Bust According to Austrian Economic Theory / Housing-Market / Economic Theory
By: Douglas_French
Is Housing a Higher-Order Good? While reviewing a book about the financial crisis, a policy analyst of the free-market persuasion pooh-poohed the notion that housing constitutes a long-term project or "higher-order good," insisting that homes are instead a "durable consumer good," and thus he believes that examining the housing meltdown through the lens of Austrian business-cycle theory is illegitimate.
Monday, November 30, 2009
Blame Keynes, Not China for America's Economic Mess / Economics / Economic Theory
By: Gerard_Jackson
Every financial crisis seems to produce its own crop of economic fallacies. The Great Depression gave us the mercantilist fallacy of "demand deficiency" that Keynes dressed up in mathematical garb and convoluted language. Instead of the boom's inevitable bust being treated as a case of "disproportionalities" that needed to be liquidated if the equilibrium was to be restored it was now defined as a simple case of insufficient demand could be easily corrected by increased government spending, i.e., a monetary expansion. (Incidentally, Keynes never argued that this policy would have restored full employment in the 1930s, quite the opposite. Those who argue to the contrary should read T. W. Hutchison's Keynes v. the 'Keynesians'...?, The Institute for Economic Affairs, 1977.)