I find the argument that Ricardo’s great principle doesn’t hold because money or persons move around more easily than goods strange. Although logistics is important in actual trade, I can’t see what logistics has to do with the principle. Moreover, saying that Ricardo’s law only is applicable without production factor mobility, amounts to
Volume 8, No. 1 (Spring 2005) This paper proceeds by explaining deflation and aggregate price determination in more detail. Then, some facts about the development of Japan, 1990–2001, are provided, together with an extensive interpretation. This is followed by a closer examination of the official Japanese interpretation, contrasting it with my
Abstract : It is a well-known empirical result that self-finance is an important option for people when financing entrepreneurship. It is, however, not entirely clear what the theoretical explanations for this might look like. In fact, the leading entrepreneurial theories even seem to indicate that questions about the existence and extent of
As concerns are raised about the risk of the Japanese economic malaise spreading to the U.S. and elsewhere, some commentators have tried to revitalize the old Keynesian idea of the “liquidity trap.” Although the trap itself follows from the J.R. Hicks IS-LM analysis, the basic idea is borrowed from J.M. Keynes. In fact, Japan has not been in such
We have now seen yet another interest rate cut by the Federal Reserve, intended to stimulate a recovery. However, you don’t have to be a particularly skeptical person to doubt that the rate cut will work this time—after all, it is the 13 th cut in the last 2½ years. The idea behind the cuts is more or less that by forcibly lowering the interest
One of the more confused propositions in the realm of currencies and exchange rates is the belief that the value of a currency is measured or determined by the exchange rate. For example, t he dollar has fallen about 13 percent against the euro in this year and has lost about a third of its value against the euro since mid-2001. This makes some
Some distinguished theorists have lately entered into a debate over the merits of free trade after two of them had suggested that “free trade has necessary conditions” and “today these conditions are not met” . In particular, they mean that David Ricardo’s law of comparative advantage don’t hold if the “factors of production” are free to move
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.
