Mises Search

Various statistics that governments produce on a regular basis carry the label “seasonally adjusted”. What is the meaning of this label? According to popular thinking the data that is observed over time (labelled as time series) is determined by four factors, which are: The trend factor The cyclical factor The seasonal factor The irregular factor

Conventional wisdom says that savings is the amount of money left after monetary income was used for consumer outlays. Hence, for a given consumer outlays an increase in money income implies more saving and thus more funding for investment. This in turn sets the platform for higher economic growth. Following this logic, one could also establish

For most economists and financial commentators, the heart of economic growth is the increase in the demand for goods and services. The view is that increases or decreases in demand are behind rises and declines in the economy’s production of goods and services. It is also held that the economy’s total output increases by a multiple of the change

Once an economy falls into recession many commentators tend to express concern that as a result of the economic slump there are now underutilized capital and labor. Resources that can be used are now made unemployed. It is held that the key factor behind this is an insufficient demand for goods and services. Once it is accepted that this key

According to the Nobel Laureate in Economics, Milton Friedman, the root of the business cycle is the fluctuations in the growth rate of money supply. Friedman held that what is required for the elimination of these cycles is for central bank policy makers to aim at a fixed rate of growth of money supply: My choice at the moment would be a

According to the president of the Federal Reserve of St. Louis James Bullard the current level of US prices is noticeably lower than what it would be if the Federal Reserve had delivered on its 2% inflation target, calling the trend “worrisome.” The yearly growth rate of the consumer price index (CPI) eased in April to 2.2% from 2.4% in March. 

Some economists such as a Nobel Laureate Paul Krugman are of the view that if the US were to fall into liquidity trap the US central bank should aggressively pump money and aggressively lower interest rates in order to lift the rate of inflation. This Krugman holds will pull the economy from the liquidity trap and will set the platform for an

After the 2007-2009 global financial crisis, fears of ballooning public debt and worries about the drag on economic growth pushed authorities in some countries to lower government spending, a tactic that economists now think may have slowed recovery. Note that in the United States the total debt to GDP ratio stood at 349 in Q1 this year. In a

The yearly growth rate of average hourly earnings in production and non-supervisory employment in the private sector eased to 2.3% in June from 2.4% in May. Many experts are puzzled by the subdued increase in workers earnings. After all, it is held the US economy has been in an expansionary phase for quite some time now. Softer real output growth

According to the National Bureau of Economic Research (NBER), the institution that dates the peaks and troughs of the business cycles, A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and