We now turn our attention to what happens with an increase in the money supply, rather than an increase in savings. This is critically important. The mercantilist idea that increasing the money supply increases prosperity was exposed as an error centuries ago by Richard Cantillon. However, modern mainstream economists, including the monetarists,
[ This article is a selection from The Skyscraper Curse: And How Austrian Economists Predicted Every Major Economic Crisis of the Last Century .] The 1960s and 70s were precarious times for the Austrian school. Ludwig von Mises was very old, retired, and would die in 1973 at the age of ninety-two. Friedrich Hayek was also retired and ensconced at
Mark Thornton, adjunct scholar on the Mises Institute and economic advisor to the Office of the Governor, Alabama, writes the following response to an editorial in the Investor’s Business Daily on Japan. IBD correctly argued, with regard to Japan’s economic problems, that flooding the market with newly credited money is no solution. However, in
For a few billion dollars you might expect to be able to bribe some small third world country into cleaning up its act, to defend the property rights of its citizens, to provide a stable currency, and to establish a non-interventionist economic and foreign policy. With little Switzerlands and industrial revolutions developing around the globe, the
There is more talk about another stimulus package to help save the economy. Word from Washington predicts that a package that includes extended unemployment benefits, food stamps, and another tax rebate check will pass in a forthcoming lame-duck session of Congress. All of these remedies actually make the patient sicker, but there is a way for
Jim Grant recently appeared on Yahoo Finance . He was critical of central bankers and economists who fear deflation and argue for unorthodox monetary policy to present deflation. He says that deflation is natural in a modern economy and that falling prices should not be feared and should be called progress. “We have never had this kind of interest
If you examine the attached graph one factor that might jump out at you is that the current “recovery” has been the worst one since WWII in terms of the percentage job losses and the time necessary for a full recovery in the job market making it, already, the most expensive since WWII. Another less clear, but equally valid observation is that the
We have been talking about the housing bubble in Canada for some time now. When the US housing bubble burst the Canadian housing bubble continued to inflate, buoyed by high commodity prices and a better regulated banking system. With commodity prices lower and energy prices crashing the Canadian housing bubble is poised to pop with the Canadian
After nine years of outrageous, unwarranted and irrational monetary policy, some people are taking the current monetary regime as normal and natural — the new normal. You can see this on corporate ballot sheets, bank leverage, and the low personal savings rate. However, even the “man on the street” is beginning to believe in this “new normal.”
The Free Market 27, no. 5 (May 2009) John Maynard Keynes often employed flowery language like “animal spirits” and “liquidity trap” to describe things he did not understand. He was, after all, more of a bureaucrat than an economist. In fact, he would best be described as an anti-economist because he eschewed things like supply and demand and
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.