Volume 17, No. 4 (Winter 2014)

KEYWORDS: John Maynard Keynes, marginal efficiency of capital, net present value, interest rates, central banking

Volume 17, No. 4 (Winter 2014)

Eswar S. Prasad
Princeton: Princeton University Press, 2014, 432 pages

On January 15, 2015 the Swiss National Bank (SNB) announced an end to its three-year-old cap of 1.20 franc per euro. (The SNB introduced the cap in September 2011.) The SNB has also reduced its policy interest rate to minus 0.75 percent from minus 0.25 percent. The Swiss franc appreciated as much as 41 percent to 0.8517 per euro following the announcement, the strongest level on record — it settled during the day at around 0.98 per euro.

ABSTRACT: Considerable research has been conducted on central bank monetary policies. Particular attention has been focused on policies that have the potential to ensure “sound money,” the symptoms of which are full employment and economic stability. Debate has centered on employing rule-based strategies to improve the monetary policies of the Federal Reserve Bank (“the Fed”).

The Austrian Economics Research Conference is the international, interdisciplinary meeting of the Austrian school, bringing together leading scholars doing research in this vibrant and influential intellectual tradition. The conference is hosted by the Mises Institute at its campus in Auburn, Alabama and directed by Joseph Salerno, professor of economics at Pace University and academic vice president of the Mises Institute.

[This article is adapted from a talk presented at the Houston Mises Circle, January 24, 2015.]

Presumably everyone in this room, or virtually everyone, is here today because you have some interest in the topic of secession. You may be interested in it as an abstract concept or as a viable possibility for escaping a federal government that Americans now fear and distrust in unprecedented numbers.

As Mises wrote in 1927:

Ludwig von Mises was careful to establish the individual actor as the basis for all economic analysis. An individual acts to improve his circumstances. To do so, he chooses among various available means in order to achieve his ends. Those ends are based on his individual values, which are subjectively established. Methodological individualism and dynamic subjectivism are distinctive features of Misesian Austrian economics.

In a comment on my interview in the Free Market that ran on the 27th as a Mises Daily asked if there was a video anywhere of my introductory lecture mentioned in the interview.

Much of that lecture was incorporated into my presentation for a Mises Circle in Colorado Springs: Mercantilism[crony capitalism]: The Unvanquished Foe of Liberty. The pdf notes summarize.