Mises Search

Why do individuals assign a greater value to gold than to bread, when bread seems to be more “useful” than gold? To provide an answer to this question economists refer to the law of diminishing marginal utility. The concept of diminishing marginal utility is the essential building block of economics. There is, however, a difference in the way this

In December 2021, the US unemployment rate fell to 3.9 percent from 4.2 percent in the month before. The number of unemployed individuals fell by 500,000 to 6.3 million. Many commentators have expressed satisfaction with the decline in unemployment. According to commentators, the fall in unemployment is indicative of a strong economy. For most

For most experts, deflation is bad news since it generates expectations for a continued decline in prices, leading consumers to postpone the purchases of present goods, since they expect to purchase them at lower prices in the future. Consequently, this weakens the overall flow of current spending and this, in turn, weakens the economy. Economic

On April 19, 2022, at the Economic Club in New York, the Chicago Federal Reserve Bank president Charles Evans said the Fed is likely to lift by year end its federal funds rate target range close to the neutral range of between 2.25 to 2.50 percent. Furthermore, on April 21, 2022, Fed chairman Jerome Powell corroborated this by stating that the Fed

After a prolonged period of easy monetary policy, the US Federal Reserve has embarked on a tighter monetary stance. On May 4, 2022, the Fed raised its benchmark interest rate by 0.50 percent, to a target range between 0.75 percent and 1.00 percent. The hike is the largest since 2000 and follows a 0.25 percent increase in March this year, the first

For most economists and politicians, the role of central bank authorities is to make the economy as stable as possible. What do they mean by economic stability? Economic stability refers to an absence of excessive fluctuation, so an economy with constant output growth and low and stable price inflation is likely to be regarded as stable. An

Many economists believe that during an economic slump government should run large budget deficits in order to keep the economy going with increases in government outlays, with the consequent budget deficit giving individuals more disposable money. This, in turn, will result in an increase in consumer spending that will lift the economy’s gross

According to John Maynard Keynes: The ideas of economists and  political philosophers , both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some

In many cultures, profit is seen as the result of individuals exploiting other individuals. Profits, however, have nothing to do with exploitation. Instead, they reflect the actions of entrepreneurs who supply consumers in the most efficient ways with valued products. For an entre­preneur to make profits, he must correctly antici­pate consumer

In order to gain insight into the future state of the economy, some analysts utilize consumer and business surveys. Randomly selected consumers and businesspersons are asked to provide their views about where the economy is heading. If a survey shows that, most of those surveyed express optimism it is regarded as good news for the economy.