What characterizes the modern economy is its complex structure of production that seemingly generates an endless amount, and an endless variety, of goods. It seems that the production structure has, as it were, a self-generating mechanism. Careful examination, however, shows that without a key ingredient, the entire infrastructure could not have
In an interesting article “ The Anatomy of Deflation “ professor Reisman makes a valid criticism of all those commentators who view deflation as a fall in prices. According to Reisman deflation is not a fall in prices but rather a decline in money supply. Consequently, he argues that all the bad things that are attributed to declining prices,
The recent weakening in the growth momentum of money M2 and M3 drew the attention of some Wall Street analysts. They think that a weakening in the growth momentum of money may be signalling bad news for the economy and financial markets in the months ahead. However, it is questionable whether the popular definitions of money are valid economic
Fed governor Bernanke believes that it is the low interest rate policy of the Fed that has laid the foundation for a sustainable economic expansion. The governor argues that the low interest rate policy has been instrumental in revitalising household and business balance sheets. But how is this possible given the massive load of debt relative to
The continuous weakness in the growth momentum of bank lending is an important factor behind a weakening in the yearly rate of growth of our monetary measure — money AMS. In the week ending November 17 money AMS fell by $11.8 billion from the previous week. For the time being the growth momentum of money AMS continues to display softening. This in
In comparison with 2000 Federal Government revenue fell by 20.9% in early 2004. Most experts regard this fall as being due to the Bush administration’s cut in taxes. However, our analysis disagrees with this. For instance, the cut in the tax rate was much more pronounced in 1963 and in 1981 yet government revenue didn’t fall then. It seems to us
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
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.
