2014-02-07
One might find it peculiar that economists, professionals whose primary focus is on models of equilibrium, expend a tremendous amount of intellectual effort in attempt to explain the occurrence of non-equilibrium phenomena known as business cycles. Jason Potts observes that “it is widely held that bubbles are inconsistent with the theory of stable general equilibria in markets, and conventionally...
2014-02-01
Hawtrey and Cassel correctly explained, and even predicted, the cause of the Great Depression, but their explanation was missed overshadowed as Keynes won over his peers during the Great Depression. (If you need to get clued in on Hawtrey and Cassel, see my paper and Doug Irwin’s work ). David Glasner and Ronald Batchelder explain , However, the success of the General Theory was such that it...
2014-02-01
In 1933, Ralph Hawtrey wrote “ Public Expenditure and the Trade Depression ” in which he presented a thorough analysis of the effects of fiscal policy. The reader should note that, in it, he refers to government expenditures as “capital outlays”. Hawtrey did not meet Keynes proposal of fiscal expansion with cheer. He notes that the complications inherent in fiscal policy make it a vehicle...
2014-01-24
In his critique of the standard interpretation of the interwar gold standard, Richard Timberlake claims that “the Fed and other central banks’ deliberate management of the gold-exchange standard prevented monetary adjustment in the period 1929-33 from resembling the pattern of equilibrium of the classical gold standard ( 2007 , 326).” He goes on to equate a “true” gold standard with the classical...
2014-01-23
Hayek’s theoretical preference was to stabilize MV. This was not a policy suggestion. He wrote in Prices and Production, Such a change in the “velocity of circulation” has rightly always been considered as equivalent to a change in the amount of money in circulation, and though, for reasons which it would go too far to explain here, I am not particularly enamoured of the concept of an average...
2014-01-16
As I continue my study of the Ralph Hawtrey's analysis of the classical gold standard in The Gold Standard in Theory and Practice , I notice that he sets forward in his narrative an argument that implies the problem that I am currently extrapolating upon in an upcoming paper. (I hope to get it up on SSRN in the next week or two.) He writes: The immediate effect of the suspension of the free...
2014-01-12
I was surprised to find that Hayek proposed some of Alex-Jones-sounding talking points before the man was born. The problem assumes the greatest importance when we consider that we are probably only at the threshold of an age in which the technological possibilities of mind control are likely to grow rapidly and what may appear at first as innocuous or beneficial powers over the personality of...
2014-01-03
Apparently George Orwell reviewed The Road to Serfdom (alongside The Mirror of the Past by K. Zilliacus) and liked a lot of it. It cannot be said too often – at any rate, it is not being said nearly often enough – that collectivism is not inherently democratic, but, on the contrary, gives to a tyrannical minority such powers as the Spanish Inquisitors never dreamed of. Professor Hayek is also...
2014-01-02
In 1944, Hayek published The Road to Serfdom as a battle cry against collectivism and an affirmation of core liberal principles. It was such a smashing success that in 1945 Reader’s Digest published a condensed version. According to John Blundell, “Hayek thought it impossible to condense but always commented on what a great job the Reader’s Digest editors did.” It is in this spirit that I feel...
2013-12-30
Bordo and Redish published " Is Deflation Depressing? Evidence from the Classical Gold Standard " in 2003. I have not seen it cited in my research. Their findings are under appreciated. They conclude that only changes in aggregate demand, particularly changes in demand for gold, had a long run impact on the price level during the classical gold standard, although increase in output had short run...