Category: Economic Theory
The analysis published under this category are as follows.
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.
Tuesday, July 07, 2015
The Uber Economy / Economics / Economic Theory
By: Rodney_Johnson
On a recent trip to the D.C. area, I needed a ride to the Baltimore airport. I dreaded calling a cab, since I knew the ride would be over $100 and the cab itself might make the 30-minute ride less than pleasant. So I took the occasion to hail an Uber car.The car arrived at 6:10am, and I had a very pleasant ride to the airport in a recent model Volvo S60.
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Thursday, June 18, 2015
Gold and Economic Inequality / Economics / Economic Theory
By: Mark_Thornton
Inequality is a top news items for 2015 driven largely by the Baltimore riots, the minimum wage debate, Thomas Piketty’s book Capital in the Twenty-First Century, and now the entry of socialist Bernie Sanders into the race for US president.
The Left wants more welfare, better schools, free college, enhanced job training, and more. The Right, in contrast, wants welfare reform, charter schools, tax reform — not to be confused with tax cuts — and use of the negative income tax.
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Wednesday, June 10, 2015
Fact Checking Paul Krugman's Claim To Be "Right About Everything", Krugtron the Invincible! / Economics / Economic Theory
By: MISES
Andrew Syrios writes:
But can the debate really be as one-sided as I portray it? Well, look at the results: again and again, people on the opposite side prove to have used bad logic, bad data, the wrong historical analogies, or all of the above. I’m Krugtron the Invincible!
Thus wrote the great Paul Krugman. A man so modest as to proclaim that “I think I can say without false modesty, a huge win; I (and those of like mind) have been right about everything.”
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Tuesday, June 09, 2015
A Six-Point Plan to Restore Economic Growth and Prosperity / Economics / Economic Theory
By: John_Mauldin
Three weeks ago I co-authored an op-ed for the Investor’s Business Daily with Stephen Moore, founder of the Club for Growth and former Wall Street Journal editorial board member, currently working with the Heritage Foundation. Our goal was to present a simple outline of the policies we need to pursue as a country in order to get us back to 3–4% annual GDP growth. As we note in the op-ed, Stephen and I have been engaging with a number of presidential candidates and with other economists around the topic of growth.
Monday, June 08, 2015
Technology Needs Capital To Produce Economic Growth / Economics / Economic Theory
By: Frank_Shostak
In his article “The Big Meh” Paul Krugman complains that despite all the information technology advances the effect so far has been negligible as far as economic growth is concerned.
Krugman writes “That the whole digital era, spanning more than four decades, is looking like a disappointment. New technologies have yielded great headlines but modest economic results. Why? ... The answer is that I don’t know — but neither does anyone else.”
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Monday, June 01, 2015
The Meaning of Financial Repression / Economics / Economic Theory
By: Mark_Thornton
Mark Thornton writes: We live in a world of massive monetary inflation and extremely low interest rates. Mortgage rates are near historic lows and yet it seems that people cannot get loans. Home sales are up, but with a near record percentage of sales made with cash, rather than a mortgage. The unemployment rate is nearing “full employment” and yet a record number of people do not have jobs.
Thursday, May 28, 2015
Austerity, Economics and Religion / Economics / Economic Theory
By: Raul_I_Meijer
There are many things going on in the Greece vs Institutions+Germany negotiations, and many more on the fringe of the talks, with opinions being vented left and right, not least of all in the media, often driven more by a particular agenda than by facts or know-how.
What most fail to acknowledge is to what extent the position of the creditor institutions is powered by economic religion, and that is a shame, because it makes it very difficult for the average reader and viewer to understand what happens, and why.
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Wednesday, May 27, 2015
Why Economic Growth Is Impossible / Economics / Economic Theory
By: BATR
The quandary of the economic dilemma continues. A globe suffering from a deflationary financial impact, while consumer prices rise well above the reported cost of living increases, does not bode well that prospects of commercial growth can rescue the world economy. What changes can overcome this predicament? Well, some academic scholar’s offers serious concern that a long term rebound towards prosperity is no longer possible.
Tuesday, May 26, 2015
The Bait-and-Switch Behind Economic Populism / Politics / Economic Theory
By: MISES
Nicolás Cachanosky writes: Argentina will hold elections this year, and a number of provinces will be electing governors. Buenos Aires, the capital city, is holding elections for mayor, and Mauricio Macri, who is stepping down as mayor, is a favorite to become the next president. Toward the end of the year, a presidential election will be held and Cristina Kirchner, after two consecutive mandates, will have to step down because she cannot be re-elected.
Thursday, May 14, 2015
Is the Keynesian Output Multiplier a Real Thing? / Economics / Economic Theory
By: Frank_Shostak
It is accepted by most economists that initial increases in consumer spending or other outlays tend to set in motion a reinforcing process which supposedly strengthens the economic growth by a multiple of initial spending.
Monday, April 27, 2015
Economic Stagnation - Let's Blame The Savers / Economics / Economic Theory
By: Michael_Pento
Just like in the world of fashion, economic terminologies come in and out of vogue. One such economic term trending recently is Secular Stagnation. First proposed by Keynesian economist Alvin Hansen back in the 1930s, Secular Stagnation was coined to explain America's dismal economic performance -- in which sluggish growth and employment levels were well below potential.
Sunday, April 19, 2015
Michel Chevalier’s Case Against the Patent System / Economics / Economic Theory
By: MISES
Louis Rouanet writes: Michel Chevalier (1806–1879) was a very influential French economist during the second half of the nineteenth century. He is still widely known in France for being the architect of the Cobden-Chevalier Treaty of 1860 which was the free-trade agreement between France and Great Britain. Michel Chevalier is, however, less known for his major contribution to the intellectual property debate.1 Contrary to Jean Baptiste Say, Gustave de Molinari, and many other French economists, Chevalier fiercely opposed the patent system. As Fritz Machlup remarked: “Among French economists, Michel Chevalier was probably the most emphatic in the joint antagonism to tariffs and patents, declaring that both ‘stem from the same doctrine and result in the same abuses.’”
Saturday, April 18, 2015
Inflation, Central Banks, and Business Cycles / Economics / Economic Theory
By: MISES
Jonathan Newman writes: The word “inflation” means different things to different people. One popular conception of inflation focuses on prices — all prices, actually. For these people, including some economists, “inflation” means a rise in the general price level, i.e., the goods and services we buy have higher price tags.
The other conception of inflation focuses on the money supply. Economists with this focus think of inflation as an increase in the amount of money in the economy. We’ll see that viewing inflation as a rise in prices can be misleading and ambiguous especially compared to viewing inflation as an increase in the money supply.
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Friday, April 10, 2015
How an Artificial Economy Collapses Organically / Economics / Economic Theory
By: Dr_Jeff_Lewis
One of the biggest news stories, almost too perfect not to be timed, was released on a day when markets closed early: Good Friday.
Conveniently not factored into major world markets was last week's horrible jobs report.
From the timing of the news, to the revisions and the real story, these numbers tell about the underlying economy. It says everything one needs to know about the broken monetary system.
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Thursday, April 09, 2015
How Easy Money Drives the Stock Market / Stock-Markets / Economic Theory
By: Frank_Shostak
In a market economy a major service that money provides is that of the medium of exchange. Producers exchange their goods for money and then exchange money for other goods.
As production of goods and services increase this results in a greater demand for the services of the medium of exchange (the service that money provides).
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