[Presented at Boom, Bust, and the Future: A Private Retreat with Austrian Economists, January 20, 2002.] In attempting an outlook for the year ahead--and Austrians firmly believe all such endeavors are an exercise in futility, given the complexity of the economy and the unknowable subjective valuations at work in human minds!--we will set out a
Gerardo Leone, commercial director at Argentine cold meat supplier Paladini SA, knows he has to revise his price list that assumes an exchange rate of 1.4 pesos per dollar. He just doesn’t know when to do that. “It’s impossible to set our prices,” said Leone. “The country is such a mess.” Without a believable peso rate, some companies are either
The following extract neatly sums up why monetarists and Keynesians are both wrong in their prescriptions about the need to use easy money and Big Government to boost “effective” demand. From The National Federation of Independent Business April Survey: “The economy is splitting with the services sector improving and the goods sector suffering,”
Last week, headlines around the world were screaming out the sad tale of WorldCom--or, as a host of copy writers have come to call it, WorldCON--and its $4 billion or so misstatement of earnings. But should we really be surprised that another poster child of the boom--especially one whose growth has come through rapid-fire acquisitions led by a
How many times have you heard the unthinking comment that we need to keep consumption burning brightly because “consumption is two-thirds of GDP”? There it is, after all, in black and white. If you look up the GDP release, you see that, in 2001, nominal GDP was $10 trillion dollars and change, while personal consumption expenditures were a touch
Corrigan heads Capital Insight , a financial consultancy. He was interviewed at the Mises Institute prior to his lecture on the “What Happened to Recovery?” MISES.ORG : It seems like the Austrian story of the boom is getting out there. CORRIGAN : My sense is that many Austrians have described the process of the boom very well. The literature deals
Finally, the mainstream has come to recognise--albeit dimly--that the phenomenology of this cycle is not like the ones to which it has been introduced by its teachers. It is not about insufficient demand or money, nor it is a result of a technology shock. It is a story of malinvestment--resources misapplied due to bad interest-rate signalling
Forget Greenspan’s timorous optimism about the economy—after all, ask yourself when, in the course of the whole dirty dozen of futile rate cuts, he last talked its prospects down ? No. Just like the tired old stock promoter he is, Bookie Al always thinks better days are ‘round the corner, so puh-leeze, People, let’s perform our own analysis
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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.
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