Tag Archives: economics

More questions for protectionists

Source: Cafe Hayek
by Don Boudreaux

"– Does your neighbor have the right to take up vegetable farming in his backyard without being fined by the government for doing so? – Does your neighbor have the right to repair his ten-year-old car in order to keep it running for a few more years? – Does your neighbor have the right to change the oil, with his own hands, in his own car? – Does your neighbor have the right to buy a used car? – Does your neighbor have the right to sell his car, to move closer to work, and to walk or bicycle daily to work rather than drive to work?" (10/28/17)


Econ as anatomy

Source: EconLog
by Bryan Caplan

"Economists are vocal proponents of the simplistic scientific method. If they can't present their work as experimental, they strive to label it 'quasi-experimental.' But if you read an introductory economics text, virtually none of the content is based on experiments. Instead, good economics texts are packed with truisms based on calm observation of humanity: incentives change behavior, trade is mutually beneficial, supply slopes up, demand slopes down, excess supply leads to surpluses, excess demand leads to shortages, externalities lead to inefficiency. These lessons are as undeniable as 'the heart pumps blood' and 'the stomach digests food.' But they're nevertheless supremely insightful and useful. Designing social institutions without considering incentives is as absurd trying to stuff food down people's lungs." (10/24/17)


I just don't get it

Source: Cafe Hayek
by Don Boudreaux

"This morning I was interviewed by my friend Ross Kaminsky on his radio show in Colorado. The subject was behavioral economics. (Richard Thaler, a renowned and respected behavioral economist, is the 2017 Nobel laureate in Economics.) I find much of Thaler’s work — and behavioral economics more generally — to be interesting. I confess, however, that behavioral economics does not 'grab' me in the way that it grabs many other economists and social scientists. I could here list the specific objections and reservations I have about behavioral economics, none having to do with the veracity of its particular findings. But I’ll not do so. I want here simply to note that the foundational motivation that seems to me to drive behavioral economists — and to drive those who are most enthusiastic about the findings of behavioral economics — is a motivation that is completely foreign to me. That motivation, as I sense it, is the desire to interfere in the lives of strangers in order to improve the lives of strangers." (10/11/17)


The world needs an Austrian School approach to economic history

Source: Ludwig von Mises Institute
by Matteo Salonia

"The Austrian School of economics has advanced our understanding of the behavioral patterns that break the cycle of poverty and make prosperity possible. The genius and usefulness of Austrian original reflections like marginal utility are now recognized by many intellectuals and students of economic theory and praxis, and even by non-Austrian economists. Other contributions, such as the business cycle theory, have convinced less people without libertarian circles and remain controversial, but they do contribute to a relatively (and increasingly) well-known cohesive body of knowledge, a systematic approach to the production of goods and services and the link between human action, markets, government interventions, and crises. The Austrian contribution to the field of history has been, in contrast, quite lacking, not in terms of theoretical cohesiveness, but in terms of output and popularity." (10/06/17)


Economists are the new astrologers

Source: Ludwig von Mises Institute
by Andrew Syrios

"When Christopher Nolan was promoting his previous film Interstellar, he made the casual observation that 'Take a field like economics for example. [Unlike physics] you have real material things and it can’t predict anything. It’s always wrong.' There is a lot more truth in that statement than most academic economists would like to admit. Alan Jay Levinovitz recently put forth the provocative argument that economics is 'The New Astrology.'" (08/29/17)


Economics and human action: Praxeology as a chosen methodology

Source: Reformed Libertarian
by C Jay Engel

"It is well known in Austrian circles that the methodology of economics is praxeology; that is, one can discover economic laws by discovering the implications of the fact that individuals act purposefully. Praxeology is the study of purposeful behavior, it is therefore not concerned with those motions and movements of the body without volitional engagement. These can include, of course, reflexes and instincts, impulses and unconscious activities (sleep walking), muscle memories, and so on. These are left for the physiologists and the psychologists. Praxeology is the study of those behaviors which are intentional; which aim toward fulfillment of a certain desire, or at least the conception of that desire. " (08/25/17)


Austrian monetary theory vs. Federal Reserve inflation targeting

Source: Future of Freedom Foundation
by Richard M Ebeling

"One of the leading policy guideposts for central banks and many monetary policy proponents nowadays is the idea of 'inflation targeting.' Several major central banks around the world, including the Federal Reserve in the United States, have set a goal of two percent price inflation. The problem is, what central bankers are targeting is a phantom that does not exist. Perhaps we can best approach an understanding of this through an appreciation of some of the writings by members of the Austrian School of Economics on matters of monetary theory and policy." (08/21/17)


My views on monetary economics

Source: EconLog
by Scott Sumner

"The lesson of the Great Recession is that macroeconomists need to spend less attention on the financial system. Bernanke attempted to integrate the financial system into macro in his famous 1983 AER article, which argued that banking problems directly depressed output during the early 1930s. That led Bernanke and others to wrongly conclude that fixing the banking problem was the way to stabilize the economy in late 2008. In fact, the Fed needed to use monetary policy to try to prevent a steep fall in NGDP. It did not even attempt to do so. Indeed the (contractionary) monetary policy of interest on reserves (adopted in October 2008) was aimed at depressing the economy, while the Fed worked to rescue the banking system." (06/29/17)


James Buchanan on racism

Source: Notes on Liberty
by Vincent Geloso

"Ever since Nancy MacLean’s new book came out, there have been waves of discussions of the intellectual legacy of James Buchanan — the economist who pioneered public choice theory and won the Nobel in economics in 1986. Most prominent in the book are the inuendos [sic] of Buchanan’s racism. Basically, public choice had a 'racist' agenda. Even Brad DeLong indulged in this criticism of Buchanan by pointing that he talked about race by never talking race, a move which reminds him of Lee Atwater. The thing is that it is true that Buchanan never talked about race as DeLong himself noted. Yet, that is not a sign (in any way imaginable) of racism. The fact is that Buchanan actually inspired waves of research regarding the origins of racial discrimination and was intellectually in line with scholars who contributed to this topic." (06/26/17)


Watching with Arnold Kling economics' left-wing march

Source: Cafe Hayek
by Don Boudreaux

"Arnold Kling has good reason to predict that, in his words, 'academic economics is on the road to becoming like academic sociology. That is, it will become increasingly driven by a left-wing agenda.' Arnold himself, in the post linked here, offers no explanation(s) for this left-wing movement of economists and, hence, of economics. I don’t doubt, however, that Arnold has a few excellent possible explanations in mind. Let here me offer an explanation of my own: economists’ increasing embrace of empiricism that isn’t solidly rooted in basic microeconomic theory of the sort that can be, and should be, taught to undergraduates." (05/22/17)