2014-08-02
Much of my research focuses on the shortcomings of the international gold standard. This is so much the case that I may come off to readers as opposing any attempts to use gold as money. There is, I believe, an opportunity for individuals to use gold, or really any asset, as money even in the modern environment. I think this would be beneficial for the financial system. Money is itself a medium...
2014-08-01
A popular source among Austrian economists and gold bugs interested in the Great Depression, Banking and the Business Cycle by Phillips, McManus, and Nelson presents a detailed analysis of the Great Depression that is thoroughly steeped in Austrian insights. Its popularity among the groups I mention makes it worthy of investigation. In this post I consider the role of gold in their narrative of...
2014-06-19
In 1935, John Maynard Keynes wrote to George Bernard Shaw: “ I believe myself to be writing a book on economic theory which will largely revolutionize—not, I suppose, at once but in the course of the next ten years—the way the world thinks about economic problems.” After he published The General Theory , Keynes’s formulation of economics was received as though it was revolutionary, especially by...
2014-06-05
“An act of individual savings means – so to speak – a decision not to have dinner to-day. But it does not necessitate a decision to have dinner or to buy a pair of boots a week hence or a year hence or to consume any specified thing at any specified date. Thus it depresses the business of preparing to-day’s dinner without stimulating the business of making ready for some future act of...
2014-06-01
A draft of my paper with Richard Wagner is up on SSRN. Traditional Austrian cycle theory starts from general equilibrium and explains how an expansion of bank credit unmatched by an expansion of saving can create a cycle of boom-and-bust, and with the bust followed by restoration of normality. In contrast, this paper offers a non-equilibrium reformulation of those earlier Austrian insights, which...
2014-05-12
In considering the appropriate framework for modeling a macroeconomics of market processes, consider two Austrian suppositions: humans act purposively and all social and economic phenomena are the result of individual action. As I have suggested before, a rule-based macroeconomics can include both of these. It allows us to include the entrepreneur in our analysis. As equilibrium is not part...
2014-04-24
It has not been unpopular from some scholars to attack methodological individualism as an unnecessary constraint on economic analysis. Individual action does not occur in an institutional vacuum. To reduce economics, or any social science, to only individual choice ignores the significance of emergent phenomena that shape the world we live in. Geoff Hodgson makes a passionate call for a reasoned...
2014-04-18
In " The Role of Expectations in Economics as a Social Science ", Ludwig Lachmann remarks about determinism, Does Professor Hicks seriously maintain that the same individual confronted with the same kind of change will invariably react in an identical-and incidentally, predictable-manner? Only such invariability of reaction would entitle us to use intensity of reaction as a criterion of...
2014-04-08
If you have been reading my blog recently, you know that I have not written kindly about the integration of rational expectations and the efficient markets hypothesis into Austrian economics. This might seem strange to any readers who believe that markets work. I sympathize with that perspective, but I believe it is inappropriate to assume this. As I have noted about some modern...
2014-04-04
Since the Great Depression, Austrian economics has moved more in the direction of equilibrium theorizing than it had been previously (I have discussed these issues before, so I will spare you). Austrian economists have, to a far lesser extent, embraced germs of uncertainty inherent in Austrian methodology. Some exception include Ludwig Lachmann, Mario Rizzo,and Gerald O'Driscoll. And of course,...