Thursday, 14 December 2017

Hayek

Knowledge Problem in Central Banking – Part I

August 2, 2017
in Blog

In my previous posts, Andreas Hoffmann and I discussed the problem of unintended consequences in monetary policy, particularly as applied to the U.S. Federal Reserve and the European Central Bank in the context of the 2008 crisis. This post tackles a related issue: the so called “knowledge problem.” This term was coined after Hayek’s engagement […]

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The Fed prints and prints, and no huge consumer price inflation?

Posted by Alex Chafuen
January 16, 2013
in Blog

In this piece, Mark Thornton tries to solve the riddle:  “Where is the Inflation?” by Mark Thornton Critics of the Austrian School of economics have been throwing barbs at Austrians like Robert Murphy because there is very little inflation in the economy. Of course, these critics are speaking about the mainstream concept of the price […]

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World Hyperinflations

Posted by Gonzalo Schwarz
August 22, 2012
in Blog

World Hyperinflations by Steve H. Hanke and Nicholas Krus Steve H. Hanke is a Professor of Applied Economics and Co-Director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at The Johns Hopkins University in Baltimore and a Senior Fellow at the Cato Institute. Nicholas Krus is a research associate at […]

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The Euro’s Fetters?

Posted by Gonzalo Schwarz
July 9, 2012
in Blog

Is the Euro harder to escape than the Gold Standard? by Gonzalo Schwarz Spanish economist Jesús Huerta de Soto just published a new article entitled “An Austrian Defense of the Euro.” In this paper Huerta de Soto develops an argument based on the lectures given by Nobel laureate Friedrich Hayek in the 1930’s at the […]

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A Free-Market Monetary System

Posted by Gonzalo Schwarz
June 25, 2012
in Blog

by Friedrich A. Hayek [A lecture delivered at the Gold and Monetary Conference, New Orleans, November 10, 1977. It made its first appearance in print in the Journal of Libertarian Studies, Volume 3, Number 1.] When a little over two years ago, at the second Lausanne Conference of this group, I threw out, almost as a sort […]

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Central Versus Free Banking: the Essay Contest

Posted by Gonzalo Schwarz
May 9, 2012
in Blog

The Mont Pelerin Society Friedrich A. Hayek Fellowships for the 2012 GENERAL MEETING OF THE MONT PELERIN SOCIETY (Prague, Czech Republic – September 2–7, 2012) “It is important here first to distinguish between the need for some ‘lender of last resort’ and the organization of banking on the ‘national reserve’ principle. … It is far […]

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I Forget What You Did Last Summer

Posted by Leonard Liggio
February 1, 2012
in Blog

Has the current crisis destroyed the market’s “property memory systems”? by Leonard Liggio Hernando de Soto contributed a column to a series, “Capitalism in Crisis”, in the Financial Times (January 31, 2012). Its title is: “Knowledge lies at the heart of western capitalism.” Although he does not mention F. A. Hayek’s pioneering work on knowledge […]

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China’s Hard Landing and Hayek

December 28, 2011
in Blog

A few days ago, Paul Krugman defended the position that “Friedrich Hayek is not an important figure in the history of macroeconomics.” This triggered quite a few reactions (here, here, here, here and here). Anyone familiar with the general aspects on the history of economic thought will find Krugman’s defense odd. To deny the relevance […]

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Literature and Monetary Thinking

Posted by Alex Chafuen
November 29, 2011
in Blog

Marjorie Grice-Hutchinson, studying Spanish literature, stumbled into the monetary writings of the authors of the School of Salamanca; she shared those writings with F.A. Hayek, who realized how relevant they were.   Murray Rothbard was also exposed to the Salamanca tradition by Hutchinson, and I count myself in that tradition (Calzada, Moreira, Huerta de Soto, […]

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Business Cycles, Open Economies and Wandering Bubbles

November 7, 2011
in Blog

In a previous post we commented on some aspects that are relevant for business cycles in the context of open economies. We also showed that in not a few cases the Mises-Hayek theory of business cycles is offered as an explanation of what went wrong. Even though business cycles have multiple causes and issues going […]

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Dr. Richard Ebeling on Competition in Currency

Posted by Gonzalo Schwarz
October 16, 2011
in Blog

“There could be no more effective check against the abuse of money by the government than if people were free to refuse any money they distrusted and to prefer money in which they had confidence. Nor could there be a stronger inducement to governments to ensure the stability of their money than the knowledge that, […]

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A Bit of Sound Money: BTC & FRB

Posted by Gonzalo Schwarz
June 21, 2011
in Blog

In the argument between proponents of fractional reserve and 100% reserve banking, it often comes down to a moral argument with the Full Reservers usually charging that fractional reserve banking (FRB) is inherently fraudulent because it is placing two full, separate claims on the same item, i.e. a piece of purchasing power*. The Fractional Reservers […]

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It is time to read Juan de Mariana again

Posted by Alex Chafuen
June 14, 2011
in Blog

In the early seventeenth century, Juan de Mariana wrote a great treatise on money. He understood that currency debasement threatened the entire economic order of the kingdom. Property rights, the ability to trade goods and services, fair wages–all these things require stable currency as Mariana notes: “No individual has the right to expect that the […]

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A Tiger by the Tail – Hayek

Posted by Tom Duncan
May 5, 2011
in Blog

“F.A. Hayek said that his biggest regret in a lifetime of writing was that he never wrote a book-length refutation of Keynesian economics. He seriously doubted that Keynesian style planning would ever captivate governments, so he focused on different things. Economist Sudha Shenoy decided to rectify the problem. As a Hayek scholar, she noted that […]

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“Obama’s Budget and It’s Discontents” – Bloomberg

Posted by Tom Duncan
February 22, 2011
in Blog

“The President’s budget is informed by his belief that government has a strategic role to play in guiding the economy. That means in some cases picking winners and losers and directing capital to individual industries and technologies that have a shot at delivering jobs and economic prosperity. His Republican opponents believe it’s better to let […]

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No Doubt Ben Bernanke Is Sincere, But What If He Is Sincerely Wrong?

Posted by Tom Duncan
December 7, 2010
in Blog

“As you no doubt know, Ben Bernanke gave an interview tonight on CBS 60 Minutes. Let me stress once again, as I have in the past, that I consider Ben Bernanke one of the most genuinely nice guys among elite economist I have had the good fortunate to meet. He has no reason to remember […]

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“The Triumphant Return of Hayek” – Newsweek

Posted by Tom Duncan
November 29, 2010
in Blog

“Last year the consensus opinion was that we are all Keynesians now. Virtually everyone in the commentariat believed that John Maynard Keynes’s solution for the Great Depression—heavy government spending to resuscitate the economy—was also the answer to today’s global downturn. The first cracks in the consensus appeared with the outbreak of the fiscal crisis in […]

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Larry White on the Business Cycle

Posted by Tom Duncan
November 11, 2010
in Blog

Peter Boettke over on Coordination Problem posted an excellent video of Larry White discussing the Austrian theory of the business cycle. Enjoy!

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“Monetary Theory and the Trade Cycle” – F.A. Hayek

Posted by Tom Duncan
October 27, 2010
in Blog

“It seems certain, however, that we shall merely make matters worse if we aim at curing the deflationary symptoms and, at the same time (by the erection of trade barriers and other forms of state intervention) do our best to increase rather than to decrease the fundamental maladjustments. More than that: while the advantages of […]

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“It’s Time for a 21st Century Gold Standard”

Posted by Tom Duncan
October 11, 2010
in Blog

“No monetary system, including gold, is perfect. But the evidence is that the gold standard is a recipe for lower-than-predicted federal interest rates (quelling the coming fiscal crisis); lower corporate bond rates (jobs); and lower mortgage rates (relief to millions of upside down homeowners). The gold standard sounds picturesque. In reality it is a technical, […]

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Here Today, Keynes Tomorrow

Posted by Tom Duncan
September 27, 2010
in Blog

“Keynesian ideas seem to pop up time and time again, especially in times of crisis. Keynes himself even sensed the impact his theories were going to have. When Keynes was writing the General Theory he wrote to George Bernard Shaw in 1935, “…you have to know that I believe myself to be writing a book […]

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Atlas Liberty Cafe with Peter Boettke

Posted by Tom Duncan
September 15, 2010
in Blog

Please join us for September’s edition of the Atlas Liberty Café on Wednesday, September 22, from 10:00 AM – 11:00 AM, at the Cato Institute.  Liberty Café seeks to bring together allies with interests in worldwide issues to (1) share perspectives on global developments, and (2) provide opportunites for networking and discovering synergies. This month’s […]

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“Spreading Hayek, Spurning Keynes”

Posted by Tom Duncan
August 30, 2010
in Blog

“To these free-market economists, government intrusion ultimately sows the seeds of the next crisis. It hampers what one famous Austrian, Joseph Schumpeter, called the process of “creative destruction.” Governments that spend money they don’t have to cushion downturns, they say, lead nations down the path of large debts and runaway inflation. Eight decades ago, in […]

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“The Austrian Theory: One More Time”

Posted by Tom Duncan
August 12, 2010
in Blog

“The Austrian theory is not a theory of recessions per se; it is a theory of the unsustainable boom. As such, it has a much stronger link to the underlying microeconomics than does much of today’s mainstream theorizing. The Austrians focus broadly on credit markets and ask what happens when the price of credit, i.e., […]

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Norman Macrae, Sound Money and the IEA

Posted by Alex Chafuen
July 29, 2010
in Blog

“For me, the most convincing has been the most radical number
70, by the Nobel Prize -winner Professor F. A. Hayek, which
advocated the Denationalization of Money”

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“A Free-Market Monetary System”

Posted by Tom Duncan
July 14, 2010
in Blog

“When a little over two years ago, at the second Lausanne Conference of this group, I threw out, almost as a sort of bitter joke, that there was no hope of ever again having decent money, unless we took from government the monopoly of issuing money and handed it over to private industry, I took […]

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Hayek on the need to win the ideas war to bring sound money back

Posted by Alex Chafuen
July 7, 2010
in Blog

In the preface to one of his books, Hayek wrote that “Indeed I must admit that–although I am a convinced believer in the international gold standard–I regard the prospects of its restoration in the near future not without some concern. Nothing would be more fatal from a long run point of view than if the […]

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Highlighting Hayek

Posted by Candice Malcolm
July 7, 2010
in Blog

Is the world finally looking to the ideas of Friedrich Hayek? It appears that the intellectual debate may be heading in a new direction. Stimulus spending has done practically nothing to reduce unemployment or spur growth; instead it has merely inflated the deficit and enraged taxpayers. Instead of falling into a vicious cycle of government […]

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Keynes vs. Hayek: The Great Debate Continues

July 7, 2010
in Blog

The debates raging over what policies will pull the U.S. economy out of its Great Recession replicate one that occurred during the Great Depression. Thanks to the efforts of Richard Ebeling, a professor of economics at Northwood University, we have compelling and concise documentary evidence. He has unearthed letters to the Times of London from […]

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Lessons Unlearned

Posted by Tom Duncan
July 2, 2010
in Blog

On Wednesday, I posted a link to F.A. Hayek’s “The Use of Knowledge in Society”. Like Leonard Read’s “I, Pencil”, Hayek’s knowledge paper explains why it is impossible for an economy to be centrally planned. I have mentioned this idea in earlier posts, but it is always worth mentioning again as the lessons learned never […]

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“The Use of Knowledge in Society”

Posted by Tom Duncan
June 30, 2010
in Blog

“The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The […]

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