Following up Joe’s excellent post on price stickiness: Note that the same argument applies to the so-called “real rigidities” — imperfect competition, co-specialized investment, search costs, efficiency wages, and the like — that are central to New Keynesian theories of unemployment. These sorts of institutional arrangements are part of a dynamic, entrepreneurial, innovative market economy, not impediments to it.
The richest and most successful Keynesian on Wall St has summarized his current policy advice succinctly. The Fed should monetize all kinds of debt in order to keep the nominal economic growth rate north of the nominal interest rate. In this way, necessary deleveraging can take place gradually and less painfully.
As kids, many of us baby boomers were often told by well meaning adults, “The policeman is your friend.” In the era of (relative) political innocence prior to the Vietnam War and Watergate, these adults could be forgiven their surpassing naiveté. But now “mere libertarian” (his term) economist Dan Klein goes these adults one better and counsels us: “Sometimes coercion is our friend.” Dan’s rationale is summed up in a PowerPoint slide bullet point: ”It is possible that a reform t
Democratic Vistas is widely and rightly regarded as the greatest of Walt Whitman’s prose works, and in it we find extensive evidence of his sympathy with ideas broadly in accord with Hayek’s vision of social evolution and the kind of order that evolution produces.
Retailer J.C. Penney just announced a new pricing policy that will make its prices more rigid and other retailers are moving in that direction. Can depression and mass unemployment be far behind?
Ben Bernanke is starting to get his way. Matt Wirz writes for The Wall Street Journal that companies with junk credit ratings are bellying up to the debt trough like no other time in history. The first quarter of 2012 will go down as the most active for junk bond issuance since 1980 when Thomson Reuters began keeping track, with 130 companies floating $75 billion in debt offerings.
In the first chapter of Classical Liberalism and the Austrian School, Ralph Raico considers the connection between Austrian economics and laissez-faire. For the most part, the early Austrian economists Menger and Bohm-Bawerk, stuck to pure theory, and did not venture much into advocacy. Just how liberal they were is a fascinating question that Raico probes thoroughly.
Wladimir Kraus, a former Rowley Fellow at the Mises Institute, successfully defended his doctoral dissertation “Essays on Reisman’s Net Consumption Theory of Profit and Interest” yesterday at the University of Aix-Marseille in southern France.
