I've read only a handful of books on Austrian economics, but they have been either totally theoretical or historical or both. Can anyone recommend any books that can help me to better understand the economy, and to interpret what's actually going on in the world?
For example, I know the mechanism by which increases in the money supply cause a divergence between demand and supply, and how it leads to to price inflation. However, I have no idea what numbers I should be looking at to determine just what the severity of the divergence is (malinvestment) or which money supply numbers would give the most insight into future price inflation, or how I would interpret those numbers to give me that insight.
Any suggestions?
The Rev
Lifes a piece of shit, when you look at it
Life's a laugh and death's a joke, it's true
Just remember it's all a show, keep em laughing as you go
Just remember that the last laugh is on you
How do you separate history/theoretical from economical in the Austrian sense? What books have you read? Remember, Austrians shun empricicism to the core. They never look at numbers and base their conclusions from them, they always use numbers to simply show other people who require empiricism that their theories work. Everytime the scenario is always different, and thats why they refuse to look at particular scenarios and base conclusions off of them. For example in the 1920s we had an inflationary bubble but prices were decreasing. Everyone else says that there was no inflation because there were no price increases, Austrians however just say there were other factors at work.
I think Mark Skousen does a bit of this in his "Structure of Production". There's also been some statistical studies to confirm the ABCT, but I don't know their name off-hand. All I know is that they made use of some of the available economic indicators to do those studies (whether or not the use of those was legitimate I can't say).
As for any other indicators, it's hard to say. Look at the definition and determine whether you think it fits what you're looking for. Unfortunately, there are a lot of things which simply aren't quantifiable--some of the most important in fact. For money supply, most use the MZM or AMS (created by Salerno and Rothbard). Shadowstats.com has some less orthodox stats. Some of the various interest rates, monetary base, yield curve, etc., give an idea of the activity of the Fed and it's effect on the loan market. Price trends in various sectors may indicate something when compared to others, as well has the sheer number of loans going to those sectors. There's a ton, it just depends what you're looking for.
Also, just use your discretion. There's no golden quantitative rule in economics, so you have to sort of just be, well, sensible. If you'r wrong, you learn. It's less economics and more "understanding", as Mises would say.
edward_1313:here's also been some statistical studies to confirm the ABCT, but I don't know their name off-hand.
There was one by somebody called Charles Wainhouse that applies econometric models to the ABCT, you can find more in one of the foot notes of Huerta de Soto's Money, Bank Credit and Economic Cycles.
"You don't need a weatherman to know which way the wind blows"
Bob Dylan
Thanks for the feedback everyone. If you can think of anything else, keep it coming! Given the economic circumstances surrounding us, I can't learn enough these days.
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