Economists of the Austrian School of economics define inflation differently than much of the mainstream of the economics profession. The typical mainstream intermediate macroeconomics textbook defines inflation as “[a]n increase in the overall level of prices” (Mankiw, Macroeconomics 5th Edition , 530). The eminent Austrian economist, Ludwig von
I. Introduction Under today’s government-controlled paper-money standards, the world’s major economies have embarked upon an unprecedented expansion of credit, starting in the early 1980s. As credit growth has been outstripping economies’ rise in output, total debt levels in percent of gross domestic product (GDP) have increased strongly. Take,
The alleged “liquidity crisis” The repercussions of the turmoil in the US subprime mortgage market are increasingly being felt around the world. What was initially thought to be a problem confined to a US credit market segment has increasingly transformed itself into an erosion of investor confidence in credit quality in general and, in some
Since the end of April 2001, the US dollar price of a troy ounce of gold has risen from US$264 to US$747 as of October 1, 2007 (Fig. 1) (November 1 spot is $783); in that period, gold has even “outperformed” the US stock market. To put it in less pleasant terms: the exchange value of the US dollar vis-à-vis gold — the world’s ultimate, freely
Symptoms of the Credit Crisis The turmoil in the US subprime mortgage market has developed into an international credit crisis. It is eroding investor confidence in credit and credit-related products and, most important, raising concerns about the solidity of the banking sector, as evidenced by banks’ elevated funding terms and diminished stock
Like clockwork, and as projected by the few good economists who understand the trade cycle, the liquidation phase of the current cycle began — once again, due to a central-bank-induced credit crisis. And yet again the credit crisis began in year 7 of the cycle, after close to 6 years of economic expansion, that is, the artificially pushed money
Hardly a day goes by without someone’s proposing how to make the bad situation in subprime mortgage lending even worse. Legislators at all levels of government are contending for ownership of the most destructive idea. ( One example of a thousand ) Finalists in this legislative race to the bottom include punitively stiff lending standards,
In March 1963, comic book fans fell in love with the first issue of Amazing Spider-Man , an account of Spidey battling the Fantastic Four. The price at the newsstand? Twelve cents. In March 2007, more than fifty years later, issue #540 of Amazing Spider-Man hit comic book stores. This time around fans had to shell out $2.99, a whopping 2,400% jump
The US Federal Reserve injected $38 billion dollars into the economy via temporary open market operations this Friday. This is the largest number of temporary repurchase agreements (specifically, one business day repos) entered into by the Fed since September 11, 2001. Back in 2001, Fed purchases of treasuries exceeded $30 billion for the four
What is the Mises Institute?
The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.