According to many mainstream economists, a lack of good correlation between the monetary growth and the growth rate of various price indexes casts doubt on the commonly held view that the key source of inflation is increases in money supply. It is also argued that before the 1990, the relationship between money supply and inflation was positively
With meagre resources at his disposal, an individual is likely to allocate these resources (i.e., his wealth) towards essentials such as food, clothing and a roof over his head. He is unlikely to allocate his meagre wealth to less essential goods as far as life and wellbeing is concerned. His variety of consumer goods is likely to be very limited.
In his speech to the Economic Club of New York on November 28 2018, the Federal Reserve Board Chairman Jerome Powell said that the US central bank’s policy interest rate is just below the neutral rate. This prompted many commentators to suggest that a tighter interest rate stance of the Fed is likely coming to an end. At the end of October the fed
For most experts a key factor that policy makers should be watching is the gap between the actual real output and the potential real output. The potential output is the maximum output that the economy could attain if all the resources are used efficiently. The gap is labeled as the output gap. In June this year the output gap - expressed in
In his speech on April 7 2010 at the Economic Club of New York the President of the New York Fed, William Dudley argued that asset bubbles pose a serious threat to real economic activity. The New York Fed chief is of the view that the US central bank should develop effective tools to counter this menace. According to Dudley, it should be the role
In order to gain insight into the future state of an economy, many economists refer to a variety of consumer and business surveys. Randomly selected consumers and businessmen are asked to provide their views about where the economy is heading. Thus, if a survey shows that the majority of the surveyed express optimism it is regarded as good news
In the New York Times September 14, 2018, in an article “We’re Measuring The Economy All Wrong,” the writer of the article David Leonhardt complains that despite strong gross domestic product (GDP) data most people don’t feel it. The writer of the article argues that, The trouble is that a handful of statistics dominate the public conversation
According to mainstream thinking, economic slumps are caused by various shocks. This means that these slumps are caused by unexpected events, which by implication are not known beforehand. Obviously if reasons behind various shocks cannot be established beforehand it makes sense to look at various symptoms of the emerging economic slump. Based on
It is a well-known belief that by means of monetary policy, the central bank can influence the rate of real economic expansion. It is also held that this influence however, carries a price, which manifests itself in terms of inflation. For instance, if the goal is to reach a faster economic growth rate and a lower unemployment rate then citizens
Various assumptions employed by mainstream economists appear to be of an arbitrary nature. The assumptions seem to be detached from the real world. For example, in order to explain the economic crisis in Japan, the famous mainstream economist Paul Krugman employed a model that assumes that people are identical and live forever and that output is
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.