Contrary to what Krugman says in his attack on Austrian business cycle theory in Slate , the Austrian or Misesian business cycle theory is not about the creation of too much capacity, but rather about the generation of uneconomic investment or malinvestment. It is about the use of scarce real funding contrary to the wishes of consumers i.e. the
From The Asian Wall Street Journal February 22, 1999 The Japanese government made several moves last week that may portend a shift to more aggressive efforts to expand the money supply. The Ministry of Finance’s decision to reverse course and once again begin buying government bonds, and the Bank of Japan’s decision to cut interest rates to an
The Asian Wall Street Journal June 15, 1999 THE DANGER OF DRAINING ASIA’S POOL OF FUNDING The word recovery is on the lips of a lot of Asia experts these days. But if Asia’s economic policy makers are to witness a long-term recovery, they will first need to reverse the interventionist policies that have distorted the real cost of capital in the
[Delivered at the Mises Institute conference, Austrian Economics and the Financial Markets, September 16, 1999, Toronto, Canada.] The word deflation is currently on the lips of many economists. Bank of Japan Governor Masaru Hayami has reiterated in parliament that the central bank will keep its ultra-easy monetary policy unchanged until the threat
The fall 1999 issue of the Austrian Economics Newsletter features an extended interview with Frank Shostak , now available on line. Dr. Shostak is chief economist of Frank Shostak is chief economist at Ord Minnett Jardine Fleming , Sydney, Australia, one of the largest brokerage houses in that country, and serves on the editorial board of The
These days, most economists agree that the Federal Reserve System tends to expand the US money supply. But in recent years, banks’ share of total financial assets has been declining. In 1980, it stood at 37%, while in 1999, the share fell to below 24%. Does this decline suggest that a major contributor to the expansion of money supply (which
[This article ran in the The Asian Wall Street Journal, January 28, 2000. Copyright (c) 2000, Dow Jones & Company, Inc.] The performance of the Malaysian stock market this past year would appear to have vindicated Prime Minister Mahathir Mohamad’s economic policies -- including his controversial decision to impose limited capital controls in
Many economists believe that the shape of the yield curve is a good predictor of economic activity. The recent “inversion” of the yield curve (which displays the relationship between interest rates and the term to maturity of identical fixed income securities) is said to sound the alarm that US economy might be heading for difficult times. The
At his Humphrey-Hawkins testimony, chairman of the Federal Reserve Alan Greenspan was asked whether the Fed attaches any significance to the money supply data. The Fed chairman replied that he regards money as an important variable but admitted that he has difficulty in establishing what part of liquidity constitutes “money.” In short, Greenspan
In his book Irrational Exuberance , Robert Shiller, a professor of economics at Yale, attributes the observed stock market mania to investor’s psychology. Shiller believes that stock market players are driven by impulse and herd behavior. The attempt to explain the present stock market behavior by means of these factors presents investors as
What is the Mises Institute?
The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.