Mises Search

Many economists think the Federal Reserve can use Phillips Curve tradeoffs between inflation and unemployment to guide Fed macro stabilization policy. Inflationary Fed policies may act as a monetary stimulus, to regulate unemployment. Data from  1948 to 1985  indicates that the Phillips Curve doesn’t actually exist. Does the data since 1985 reveal

Demand Side economists, like Paul Krugman, claim that officials can use changes in the inflation rate and in public debt to “manage the economy”. Higher inflation rates supposedly act as a stimulus to increase GDP, and to lower the unemployment rate. How is this supposed to work? In the original form of this argument workers are fooled by

Federal laws and policies concerning disabilities have changed substantially since the  Americans with Disabilities Act  (ADA) passed over 33 years ago. Were changes in policy towards disabled Americans done in the public interest, or for political purposes? The disability-population ratio fell to a minimum point in the summer of 2010, at which

The American economy fell into an unofficial recession during the first half of 2022. Yet, unemployment  fell  to low levels by the summer of 2022. Why did 2022 GDP fall? The US endured a  historic drop in labor productivity during the first half of 2022 . Productivity and GDP have recovered recently- despite the fact that unemployment rose half a

The latest jobs report looks good, at first glance. The umployment rate is below 4%, though it increased since April. Employers added jobs, but mostly in the public sector. Last July I  posted  something on how declines in the private-public employment ratio (PPER) predict recessions. The PPER was 5.92 last summer. The latest PPER is 5.84. The

In 2022 economist Larry Summers predicted that inflation would only be brought down by an increase in the unemployment rate for a couple of years. Why? If workers expect high price inflation in the near future, they press for wage increases. Wage increases discourage employers from hiring . A low unemployment rate equilibrium requires a balance of

In the midst of the debate between Keynesian and monetarist economists, the positions of these two groups came to be known as “saltwater economics” and “freshwater economics,” respectively. These labels derived from the location of centers of Keynesian thought (MIT and Harvard) near an ocean and the location of the center of monetarist thought

The term “market failure” came into frequent use by economists during the 20 th century. During the 1930s, economists like Joan Robinson and Abba Lerner succeeded in focusing the attention of their colleagues on imperfections in market prices.  Deviations from optimal prices in markets were responsible for failures to direct resources to their

There are legitimate reasons to question the need for the Austrian paradigm as an alternative to mainstream economics. Mainstream economists understand and appreciate marginal value theory, comparative advantage, and other basic propositions that Austrian economists promote. Mainstream economists also appreciate the fact that competition in

Many of the most interesting issues in economics derive from a lesser-known category of alleged market failure: so-called asymmetric information. The problem of asymmetric information is simple. Different people know different things about economic goods. The seller of a used car knows the condition of that car better than do prospective buyers.