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Inflation as a Tool of the Radical Left
Inflation as a Tool of the Radical Left “Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch its currency….Lenin was certainly right. There is no subtler, no surer way of overturning the existing basis of society than to debauch the currency. The process engages all the […]
Why the New Economics Just Boils Down to Printing More Money
WHY THE NEW ECONOMICS JUST BOILS DOWN TO PRINTING MORE MONEY [Editor’s Note: this article is adapted from a 2003 essay in the Quarterly Journal of Austrian Economics entitled “New Keynesian Monetary Views: A Comment.” As economists abandon theory in favor of makeshift plans to flood the economy with stimulus, Hülsmann here provides some helpful reminders of […]
The Bank of England’s Governor Fears a Liquidity Trap
The Bank of England’s Governor Fears a Liquidity Trap The global economy is heading towards a “liquidity trap” that could undermine central banks’ efforts to avoid a future recession according to Mark Carney, governor of the Bank of England. In a wide-ranging interview with the Financial Times (January 8, 2020), the outgoing governor warned that central banks […]
Helicopter Money Is No Panacea
Helicopter Money Is No Panacea In recent decades, the Fed has engaged in a series of policy interventions and market manipulations that have paradoxically left it more powerful even as those interventions left a trail of crashes, collapses and calamities. This contradiction between Fed omnipotence and Fed incompetence is coming to a head. The economy […]
Can Expansionary Fiscal and Monetary Policies Counter Recessions?
CAN EXPANSIONARY FISCAL AND MONETARY POLICIES COUNTER RECESSIONS? When signs of economic weakness emerge, most economics experts are quick to embrace the ideas of John Maynard Keynes. For most economists the Keynesian remedy is always viewed with positive benefits- if in doubt just push more money and boost government spending to resolve any possible economic […]
Keynes is Dead; This is the Long Run
KEYNES IS DEAD; THIS IS THE LONG RUN “In the long run, we are all dead.”–JOHN MAYNARD KEYNES ______________________________________________________________________________________________________________ INTRODUCTION John Maynard Keynes, an English economist and author, has been held in high esteem for several decades thanks to his groundbreaking work in economics in the early 20th century. The theory he popularized in an […]
Economic Theories & Debt Driven Realities
Economic Theories & Debt Driven Realities One of the most highly debated topics over the past few months has been the rise of Modern Monetary Theory (MMT). The economic theory has been around for quite some time but was shoved into prominence recently by Congressional Representative Alexandria Ocasio-Cortez’s “New Green Deal” which is heavily dependent on massive […]
Is an Increase in Demand Key for Economic Growth?
IS AN INCREASE IN DEMAND KEY FOR ECONOMIC GROWTH? Whenever the so-called economy shows signs of weakness most experts are of the view that what is required to prevent the economy sliding into recession is to boost the overall demand for goods and services. If the private sector fails to increase its demand then it […]
Fiscal Stimulus and Economic Growth–Are They Related?
FISCAL STIMULUS AND ECONOMIC GROWTH – ARE THEY RELATED? For most experts a key factor that policy makers should be watching is the gap between the actual real output and the potential real output. The potential output is the maximum output that the economy could attain if all the resources are used efficiently. The gap […]
Chicago Hopes To “Solve” Record Pension Deficit With Creative Solution: More Debt
Chicago Hopes To “Solve” Record Pension Deficit With Creative Solution: More Debt John Maynard Keynes would be thrilled to hear about the brilliant solution Chicago has come up with to help solve its pension deficit: issue a $10 billion bond and take on more debt. Chicago’s pension deficit has been a problem that we’ve been covering […]
Macroeconomics Has Lost Its Way
MACROECONOMICS HAS LOST ITS WAY The father of modern macroeconomics was Keynes. Before Keynes there were macro considerations, which were firmly grounded in human action, the personal preferences and choices exercised by individuals in the context of their own earnings and profits. In order to give a role to the state, Keynes had to get […]
Macroeconomics Has Lost Its Way
Macroeconomics Has Lost Its Way The father of modern macroeconomics was Keynes. Before Keynes there were macro considerations, which were firmly grounded in human action, the personal preferences and choices exercised by individuals in the context of their own earnings and profits. In order to give a role to the state, Keynes had to get […]
World Bank Solution for Lack of Jobs: Cut Worker Protections
World Bank Solution for Lack of Jobs: Cut Worker Protections The World Bank is in the process of completing its “World Development Report 2019: The Changing Nature of Work” and, surprisingly, the latest draft version opens with quotes from Karl Marx and John Maynard Keynes. Has the World Bank suddenly lost sight of its purpose […]
The Growing Pool of Real Savings Permits the Illusion That Central Bank Can Cause Economic Growth
THE GROWING POOL OF REAL SAVINGS PERMITS THE ILLUSION THAT CENTRAL BANK CAN CAUSE ECONOMIC GROWTH Many commentators are of the view that the US central bank should pursue policies that will prevent the possible decline of the economy into a liquidity trap hole. What is this all about? In the popular framework of thinking […]
Why Mainstream Economics Consistently Fails to Explain the Occurrence of Recessions?
WHY MAINSTREAM ECONOMICS CONSISTENTLY FAILS TO EXPLAIN THE OCCURRENCE OF RECESSIONS? In his article released on March 21 2018 – Economics failed us before the global crisis – Martin Wolf the economics editor of The Financial Times expressed some misgivings about macroeconomics. Economics is, like medicine (and unlike, say, cosmology), a practical discipline. Its goal […]
