Sunday, 20 August 2017

Monthly Archives March 2016

Austrian business cycle theory and optimal resource reallocation

March 30, 2016

Last time, I argued that the two chief components of Austrian business cycle theory (ABCT)—inconsistent consumption and investment plans engendered by faulty interest rate signals, and reallocation of resources during the bust—could be understood even within a tight framework of rational expectations and ‘equilibrium always’ modeling conventions. I will now tackle the second of these […]

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Why sound money?

March 28, 2016

In recent posts, George Selgin (here and here) criticizes anthropologist David Graeber for sustaining that anthropological discoveries debunk long standing core economic beliefs. A superficial reading of economics might suggest that this discipline upholds that transactions occur either in the form of barter or with the aid of money. The reason for this dichotomy is not to reject the […]

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Tall Paul Volcker

March 21, 2016

The Institute for Economic Education at East Texas Baptist University has produced a funny music video titled The Legend of Tall Paul. Paul Volcker, of course, is widely credited with getting monetary policy under control in the 1980s, ushering in a period in US economic history known as the Great Moderation. Enjoy!

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The never-ending Argentine fiscal business cycle

March 16, 2016

15 years after carrying out the biggest sovereign default in its history, Argentina finally reached a debt accord with its holdouts. The agreement between Mauricio Macri’s administration and the holdout litigants in the U.S. Court of Law has finally been reached. This is good news for the country. The government can resort, if needed, to […]

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On ‘Reimagining Money’

March 14, 2016

In a recent article at The Atlantic, Douglass Rushkoff waxes romantically about local currencies and time banks. He thinks both will shift the focus from wealth to trust. I disagree. As I explain below, both local currencies and time bank coupons are worse monies than those we commonly use. Moreover, they do not “encourage admirable […]

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More quantitative easing?!

March 2, 2016

I am often met with astonishment when I express what seems to me the rather obvious point that monetary policy was effectively tight beginning in 2008, transforming what might have been a rather routine recession into the Great Recession. “What about quantitative easing?” they ask. “Yes, the Fed expanded its balance sheet,” I reply. “But […]

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