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The yearly growth rate of US’s “ Austrian money supply “ jumped by almost 80 percent in February 2020 (see chart). Given such massive increase in money supply, it is tempting to suggest that this lays the foundation for an explosive increase in the annual growth of prices of goods and services sometime in the future. Some experts are of the view

Most commentators label increases in the prices of goods and services over a period of time as inflation. Ludwig von Mises however, held that the popular definition of inflation is erroneous. He wrote in Economic Freedom and Interventionism (p. 99), Inflation, as this term was always used everywhere and especially in this country, means increasing

On August 16, 2023, the Federal Reserve expressed concern about the pace of inflation, saying future rate hikes could be necessary if conditions do not change. Currently, the federal funds target rate is between 5.25 and 5.50 percent, the highest level in more than twenty-two years. Mainstream economists and journalists think about inflation in

According to mainstream thinking, economic slumps are caused by various shocks. This means that these slumps are caused by unexpected events, which by implication are not known beforehand. Obviously if causes behind various shocks cannot be known in advance, it makes sense to look at various symptoms of the emerging economic slump. Based on the

Listen to  the  Audio Mises Wire  version  of this article. While in the natural sciences a laboratory experiment can isolate various elements and their movements can be followed through, there is no equivalent in the economic discipline. The introduction of econometrics and model building is an attempt to produce a laboratory where controlled

According to modern portfolio theory (MPT), financial asset prices fully reflect all available and relevant information, and any adjustment to new information is virtually instantaneous. For instance, if the central bank raises interest rates by 0.5 percent, and if market participants anticipated this action, asset prices will reflect this

The increase in the growth rate of the Consumer Price Index (CPI) has fueled concerns that if the rising trend were to continue the Fed is likely to tighten its interest rate stance. Observe that the yearly growth rate in the CPI climbed to 4.2 percent in April from 2.6 percent in March and 0.3 percent in April 2020. We hold that because of

According to a relatively new field of economics called behavioral economics (BE), emotions play an important role in an individual’s decision-making process. On this the Nobel laureate Vernon Smith writes,  People like to believe that good decision making is a consequence of the use of reason, and that any influence that the emotions might have

Listen to  the  Audio Mises Wire  version  of this article. President Joe Biden has promised to raise the minimum wage from $7.25 to $15 per hour.  Some economists are of the view that the increase in the minimum wage could cause an increase in unemployment. Other economists think that the increase is unlikely to harm the labor market. Hence, they

According to some commentators such as economics Nobel Laureate Paul Romer, technical knowledge is key to economic growth. But if this is the case, why do third world economies continue to experience poverty? After all, individuals in these economies have access to the same technical knowledge as the developed world. Careful examination, however,