In his magisterial Crisis and Leviathan, Robert Higgs shows that the growth of government in the twentieth century can largely be explained by patterns of crisis and response. These crises can be real (World Wars I and II, the Great Depression, stagflation) or imagined (inequality, the various isms). In either case new government programs, agencies, and policies are established, purportedly as temporary responses to the perceived emergency.
Beltway libertarian economists are today hailing the Fed’s efforts to cure the economic crisis or are even suggesting they intervene to a greater extent to quell fears in markets. That is like saying we need to spread the coronavirus to more people to stop the pandemic.
Everywhere one looks there seems to be panic about the coronavirus. The Centers for Disease Prevention, the World Health Organization, and now the National Institute of Allergy and Infectious Diseases almost seems to be encouraging a frenzied response with their statements on the illness. Luckily Dr.
The Federal Reserve announced today that it will aggressively begin injecting liquidity into the market again. From the New York Fed’s website:
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This is how the budget process in Washington begins. Step one: the president submits his budget to Congress. Step two: Congress puts the president’s budget in a drawer somewhere and forgets about it. Step three: Congress passes a budget it likes instead.
Most economists consider the use of sophisticated mathematical and statistical methods key to understanding the complexities of economics.
By means of mathematical and statistical methods, an economist establishes relationships between variables. For example, personal consumer outlays are related to personal disposable income and interest rates. Most economists would present this relation as a mathematical function:
C=a*Yd – b*i
