Since August 15, 1971, the US dollar has been completely severed from gold. President Richard Nixon suspended the most important component of the Bretton Woods system, which had been in effect since the end of World War II. Nixon announced that the US would no longer redeem dollars for gold for the last remaining entities that could: foreign
Economist Jeremy Horpedahl dismissed the silly claim by anticapitalists that capitalism must engineer food scarcity for the sake of profits. He presented a graph of Bureau of Labor Statistics (BLS) data demonstrating a substantial decrease in household food expenditure as a percentage of income—from 44 percent in 1901 to a mere 9 percent in 2021.
“Experts” at the Federal Reserve and other central banks proudly broadcast the potential “financial inclusion” that could be achieved with a central bank digital currency (CBDC). In the Fed’s main CBDC paper , “Money and Payments: The U.S. Dollar in the Age of Digital Transformation,” they make it clear: “Promoting financial inclusion—particularly
It feels like a silly thing to say, but board games are not real life. Playing a few rounds of Operation does not make you a surgeon. Unlike in Battleship, real-world battleships do not sit still on a ten-by-ten grid. Similarly, Monopoly does not correlate to “free-market capitalism,” despite anticapitalist claims like this tweet with over a
Why have central banks settled on a 2 percent price inflation target? Project Syndicate asked four economists about this target and whether it is still appropriate. I’ll summarize their answers and then consider Mises’s position on “stabilization policy.” Four Economists’ Answers to “Is 2 Percent Really the Right Inflation Target for Central
As Bob Murphy and I discussed on the Human Action Podcast, economists and financial news media are already declaring macroeconomic victory by claiming that the Federal Reserve has achieved a “soft landing,” meaning that they have raised interest rates just enough to quell price inflation without causing a crisis or recession. Even Fed Chair Jerome
Drug addicts suffer major withdrawal symptoms when they go cold turkey. In the case of high-tech startups and their banks (like Silicon Valley Bank), the super-low-interest-rate stimulant has been taken away by the drug dealer (the Fed) via interest rate hikes. With cheap credit drying up, firms switched to pulling cash out of SVB, all while the
Paul Krugman, in an article titled “ None Dare Call It Victory ,” calls on the Fed to change its inflation target from two to three percent, which would mean that the Fed could go ahead and reverse course on tightening, since at least one official price inflation measure has reached 2.9 percent. He gives some reasons for three percent (or, as he
Abstract: Austrian economists have debated issues of monetary theory and inflation extensively, but there is still no agreement on the definition of inflation. Mises (1953, 240) defined inflation as an increase in the supply of money not offset by an increase in the demand for money, leading to a fall in the purchasing power of money (PPM).
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.