Most economists believe that a growing economy requires a growing money stock, on grounds that growth gives rise to a greater demand for money which must be accommodated. Failing to do so, it is maintained, will lead to a decline in the prices of goods and services, which in turn will destabilize the economy and lead to an economic recession-or,
Recent releases of key economic indicators paint a gloomy economic picture. Year-on-year industrial production fell by 5.8 percent in September, after a fall of 4.6 percent in the previous month. This is the twelfth consecutive decline. The yearly rate of growth in retail sales fell to 0.2 percent in September from 3.7 percent in August.
The government’s releases of various economic indicators such as GDP, the CPI, and unemployment receive wide coverage in popular media such as TV networks and newspapers. In a measured and authoritative voice, various economists and other experts who are interviewed discuss their views regarding the health of the economy. Thus, a rise in an
[Presented at Boom, Bust, and the Future: A Private Retreat with Austrian Economists, January 20, 2002.] Does the recent revival in various economic data raise the possibility that the Fed’s aggressive loose monetary stance is starting to yield results? The GDP edged up slightly in the fourth quarter of last year (though even press reports
In commenting on the ongoing Japanese slump, President Bush made the worst gaffe of his presidency. Bush relayed to a news conference that he and Prime Minister Junichiro Koizumi had discussed the “devaluation issue” in their talks. As the yen sank, the White House quickly clarified that Bush had meant the “deflation issue.” It’s true that
On August 16, the U.S. government will debut of a new type of Consumer Price Index (CPI), one which it says will better reflect true inflation. Unlike the existing CPI, the new index will be subject to revisions as more detailed data become available. The regular CPI has long been criticized for overstating the actual rate of inflation. The hope
Against the background of strong increases in various monetary aggregates, some economists have expressed concern that this could lead to a higher rate of inflation in the months ahead. The yearly rate of growth of money M2 jumped from 6.6 percent in January 2001 to 10.5 percent in December. However, other economists believe that a decline in the
The recent rebound in some key economic indicators has prompted many economists to suggest that the aggressive lowering of interest rates by the Fed is starting to “grow” the economy. Notwithstanding this success, they contend, the central bank must remain on guard in order to prevent inflation getting out of control. Thus, St. Louis Federal
A recent academic study by economists Karl Case, John Quigley, and Robert Shiller of consumer-spending behavior in the U.S. and 13 other developed nations indicates that the wealth effect from housing is twice as great on consumer spending as comparable changes in stock-market wealth. In the U.S., for example, they found that a 10-percent gain in
The National Bureau of Economic Research (NBER), the academic panel that dates U.S. business cycles, moved a step closer to declaring an end to the recession that it said began in March 2001. The panel often waits for months before calling the end to a slump, in order to ensure that there is not be a renewal of economic weakness. The possibility
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.
