The highest cost of the Fed policy may be liberty in Europe.

I recently finished reading a book on the South Sea Bubble. I was surprised at how fascinating it was. I have heard of the South Sea Bubble before, but I couldn’t really tell you much about it. I knew that it happened in the early 1700s and there was also something called a Mississippi Bubble. However, I couldn’t make a distinction between the two, until now.

In chapter 1 of his groundbreaking treatise, The Theory of Money and Credit, Ludwig von Mises explains what money is: a universally, or at least commonly, used medium of exchange.1 In

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?