Mises Wire

Good Economic Theory Focuses on Explanation, Not Prediction

Philosophy and Methodology

Blog12/18/2019

Many modern economists think the standard for a "good" economic theory is how well it predicts future trends. Not only are most economists terrible at making predictions, but the whole premise of economics as being about predicting things is a flawed idea.

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Why Central Banks Aren't Really Setting Interest Rates

Capital and Interest TheoryMoney and Banking

Blog12/11/2019

Central banks can only distort and mask real interest rates with monetary policy. Interest rates are really set by each individual's time preference.

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Central Banks May Be Driving Us Toward More Waste, More Carbon Emissions

The EnvironmentBusiness Cycles

Easy-money policies pushed by central banks may be redirecting wealth away from investment, and toward greater production and consumption of cheap consumer goods. That's not "green."

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Easy-Money Policies Don't Solve the Problem of Idle Resources

Blog12/07/2019

Loose monetary policy can get people to use idle resources. But this new economic activity will likely be in the service of bubble industries that don't create real wealth. Moreover, these bubbles create many idle resources of their own when the bust comes.

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Rationality in the Real World Isn't What Economists Think It Is

Blog12/02/2019

The world doesn't follow predictable patterns based on averages of long-term probability. Ordinary people apparently know this better than statisticians do.

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Exports: Currency Devaluation Won't Grow the Economy

Money and Banking

Blog12/02/2019

When governments devalue the currency to push more exports, the country is getting rich in terms of foreign currency, but it is getting poor in terms of real wealth.

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Capital Accumulation, Not Government, Is the Key To Technological Innovation

The Entrepreneur

Blog11/26/2019

The diversion of real funding from the private sector toward government projects — no matter how important these projects appear to be — in fact, disrupts the process of real wealth generation.

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