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Three Lectures on the Rate of Wages

BooksJanuary 8, 2010
The inquiry into the causes affecting wages is the most important branch of political economy.

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The Rate of Interest: Its Nature, Determination, and Relation to Economic Phenomena

BooksMarch 11, 2011
The problem of interest has engaged the attention of writers for two thousand years, and of economists since economics began. And yet, with the exception of what has been accomplished by Rae, Bohm-Bawerk, Landry, and some others, very little progress has been made toward a satisfactory solution.

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The Fed’s Confusion Over the "Natural Rate" of Unemployment and Inflation

Mises DailyJuly 20, 2015
The Fed often uses the "natural rate" of unemployment to determine whether or not it should raise interest rates. But as with so many metrics the Fed uses, this one is based on arbitrary measures that can be manipulated to suit Fed policy...

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The ECB and the Negative-Interest-Rate Game

Mises DailyMay 28, 2015
The European Central Bank is continuing with its negative interest rate policy, but it's not having the desired effect. Instead, the central bank is just filling the void by buying up government debt with newly created money...

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Why We Need Deflation and Higher Interest Rates

Mises DailyMarch 28, 2015
Once a recession sets in, markets can only repair themselves if prices — including wages — are allowed to fall where necessary. The resulting increases in real interest rates are the key to spurring new economic activity...

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The "Natural Interest Rate" Is Always Positive and Cannot Be Negative

Mises DailyMarch 21, 2015
We're now in the world of negative interest rates, and Mises’s insights about human action are the key to understanding the implications of this, and in understanding the impossibility of a negative “natural” or “originary” interest rate...

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Default! Default!

Institute PublicationsNovember 1, 2001
We will never resort to a bailout, said the Bush administration concerning the financial failures of the Argentinian government. That was one week before the same administration arranged an $8 billion line of credit for the same government.

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The Failure of Fixed Rates

Institute PublicationsJanuary 1, 2004
Volume 24, Number 1 January 2004 "The world is in permanent monetary crisis," Murray N. Rothbard once observed, "but once in a while, the crisis flares up acutely, and we noisily shift gears from one flawed monetary system to another." Monetary systems built on floating fiat...

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Review of To Serve and Protect: Privatization and Community in Criminal Justice by Bruce Benson

Institute Publications
This is the most important book on public policy to be published in a long time. Benson takes on the most pervasive government activity, the criminal justice system, and addresses the critical issue of our high crime rate. There are no clear “academic” solutions to this problem, but...

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License Tags and Free Speech

Institute PublicationsDecember 1, 2001
This past September, the state government of South Carolina came under fire for issuing a special license plate bearing the slogan "Choose Life." Affronted abortion-rights groups quickly filed suit, claiming that the state was violating the first and fourteenth amendments by failing to...

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The Natural Rate of Interest Rule

Institute PublicationsJanuary 30, 2015
This article reviews the Fed’s performance with particular emphasis on its contribution to the 2008 crisis and then suggests an alternative policy which, had it been in place would have dampened the most recent boom and bust...

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The Interest Rate Question

Institute PublicationsFebruary 1, 1988
The Marxists call it "impressionism": taking social or economic trends of the last few weeks or months and assuming that they will last forever. The problem is not realizing that there are underlying economic laws at work. Impressionism has always been rampant; and never more so than in...

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Fixed-Rate Fictions

Institute PublicationsJuly 1, 1994
Governments, especially including the US. government, seem to be congenitally incapable of keeping their mitts off any part of the economy. Government, aided and abetted by its host of apologists among intellectuals and policy wonks, likes to regard itself as a deus ex machina (a "god out of...

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8. The Entrepreneurial Component in the Market Interest Rate

Online Text Page from Man, Economy, and State, with Power and Market

In the ERE, as we have seen, the interest rate throughout the economy will be uniform. In the real world there is an additional entrepreneurial (or “risk”) component, which adds to the interest rate in particularly risky ventures, and in accordance with the degree of risk. (Since “risk” has an actuarially “certain” connotation, we may better call it “degree of uncertainty.”) Thus, suppose that the basic social time-preference rate, or pure rate of interest, in the economy is 5 percent.

The Enterprise of Community: Market Competition, Land, and Environment

Institute Publications
We hear a lot of expressed concern about conserving the environment, but no one talks much about producing it. Why not manufacture it competitively and sell it in the free market like other goods and services—and even bundle it with product support? As a matter of fact, that is being done. It...

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Biography of Wilhelm Röpke (1899-1966): Humane Economist

BooksAugust 1, 2007
"I champion an economic order ruled by free prices and markets...the only economic order compatible with human freedom." Wilhelm Röpke devoted his scholarly career to combating collectivism in economic, social, and political theory. As a student and proponent of the Austrian School, he...

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Natural and Neutral Rates of Interest in Theory and Policy Formulation

Institute Publications
In contemporary policy discussions, the interest rate occupies center stage if only because the much-watched federal funds rate is the Federal Reserve’s sole surviving policy target...

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Negative Interest Rate: Toward a Taxonomic Critique

Institute Publications
A basic principle of Austrian economics is that the originary rate of interest (the rate of discount of future goods compared to present, otherwise identical, goods) can never be negative. The reason for this arises not because capital is productive, nor out of man's psychology. Nevertheless,...

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Walk Away: The Rise and Fall of the Home-Ownership Myth

BooksNovember 18, 2010
This elegant and fact-filled book by Doug French examines the background to the case of "strategic default," or walking away from your home, and considers its implications from a variety of different perspectives...

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The New Despotism

BooksMarch 16, 2010
When the modern political community was being shaped at the end of the 18th century, its founders thought that the consequences of republican or representative institutions in government would be the reduction of political power in individual lives.

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