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Category Archives: Economie
Austrian Business Cycle Theory, by Jesús Huerta de Soto
Jesús Huerta de Soto, Money, Bank Credit, and Economic Cycles, Second Edition.
Chapter 5 : Bank Credit Expansion and Its Effects on the Economic System
The term first-order economic goods has traditionally referred to those consumer goods which, in the specific, subjective context of each action, constitute the goal pursued by the actor in performing the action.
The achievement of these goals, consumer goods, or first-order economic goods, is necessarily preceded by a series of intermediate stages represented by “higher-order economic goods” (second, third, fourth, etc.). The higher the order of each stage, the further the good is from the final consumer good.
This picture might help in better understanding the concept. On the left we have the early stages of production, or stages furthest from consumption. On the right we have the final stages of production, or stages closest to consumption.
Austrian Business Cycle Theory : On the Interest Rate and the Cambridge Capital Controversy
Critics of the ABCT believe that CCC constitutes a strong rejection of the austrian theory of capital. Apart from the empirical evidence of ABCT, one problem with the assumptions of the reswitching theory is that it assumes that ABCT is all about the change in capital-intensiveness following a change in interest rates. ABCT does not even depend on the change in interest rates per se, nor even on a “single” natural interest rate as some wrongly believed; Sraffa being just one of them. But as the reswitching technique theory implies the possibility of capital reversing, which is to say, the association between the nature of the production techniques employed and rate of interest is not a monotonic one. That is, a decline in interest rates might lead to a lengthening in the structure of production through more capital-intensive techniques, when at the same time a further decline in interest rates will trigger a drop in the length of the structure of production through less capital-intensive techniques. In other words, that relationship is an U-shaped.
The Pure Theory of Capital – Part I
Prices and Production, Lecture 3, The Working of the Price Mechanism in the Course of the Credit Cycle
Root causes of the defects in US Health Care
Some explanations of the problems related to the US health care are listed below. In short, their system is actually not encouraging the customer to discriminate between the different providers, leading to an increase of bad suppliers and services. He thinks that the government will keep under control the market deficiencies such as information asymmetry, conflict of interests, high prices, lower quality and so on. It is not unlikely that the presence of these regulations might have prevented the formation of institutions that would help to reduce market imperfections. This is what we would expect if the fundamentals of a free market economy can be best described by the trial and error process. Economic forces tend to correct for the lack of efficiency in some parts of the economy where the needs of the customer are not fully satisfied because such cases imply some profitable opportunities that capitalists may exploit. Health care is probably not an exception to this rule.
Less than Zero: The Case for a Falling Price Level in a Growing Economy
Less than Zero: The Case for a Falling Price Level in a Growing Economy
George Selgin, 1997.
Water for Sale: How Business and the Market Can Resolve the World’s Water Crisis
Water for Sale: How Business and the Market Can Resolve the World’s Water Crisis
Fredrik Segerfeldt, 2005.
Originally published as Vatten till salu : Hur företag och marknad kan lösa världens vattenkris, copyright ©2003 Timbro, Stockholm.
Rothbard’s Criticism of Keynesianism
Man, Economy, and State, 2nd edition, Murray N. Rothbard.
Chapter 11 – Money and Its Purchasing Power
5. The Demand for Money
B. SPECULATIVE DEMAND
One of the most obvious influences on the demand for money is expectation of future changes in the exchange-value of money. Thus, suppose that, at a certain point in the future, the PPM [i.e., purchasing power of the monetary unit] of money is expected to drop rapidly. How the demand-for-money schedule now reacts depends on the number of people who hold this expectation and the strength with which they hold it. It also depends on the distance in the future at which the change is expected to take place. The further away in time any economic event, the more its impact will be discounted in the present by the interest rate. Whatever the degree of impact, however, an expected future fall in the PPM will tend to lower the PPM now. For an expected fall in the PPM means that present units of money are worth more than they will be in the future, in which case there will be a fall in the demand-for-money schedule as people tend to spend more money now than at the future date. A general expectation of an imminent fall in the PPM will lower the demand schedule for money now and thus tend to bring about the fall at the present moment.
Reisman’s Criticism of Keynesianism
Capitalism: A Treatise on Economics
by George Reisman, 1996.
CHAPTER 15
AGGREGATE PRODUCTION, AGGREGATE SPENDING, AND THE ROLE OF SAVING IN SPENDING
Application to the Critique of the Keynesian Multiplier Doctrine
As should now be clear, any rise in wages, in the demand for goods at wholesale, or in the demand for capital goods of any kind depends on what is not consumed, but saved and productively expended. This is because consumption expenditure is merely consumption expenditure. It does not incorporate productive expenditure. The demand for goods at wholesale, for materials and machinery, and for labor by business is possible only to the extent that people do not consume but save and productively expend. Yet the Keynesians regard saving as a “leakage”and as allegedly diminishing the amount of subsequent incomes.
Analyse Economique 