Importance of a theory in economics
It is a common belief that sound economics must be based on facts and not on theoretical reasoning as such. Some commentators are…
The essence of inflation
The popular definition cannot explain why inflation is bad According to the popular way of thinking, inflation is defined as a general increase…
Lockdowns and the economy
The imposition of lockdowns to counter the spread of the infection from the coronavirus is likely to severely damage the real economy. As…
Cost cutting and economic growth
Some commentators regard cost cutting by companies in order to secure profits as a major threat to the economy. They hold that if…
The questionable role of quantitative methods in economics
Most economists consider the use of sophisticated mathematical and statistical methods key towards understanding the complexities of economics. They are of the view that…
Government budget deficit and economic growth
The US budget had a deficit of $32.6 billion in January compared with a deficit of $13.3 billion in December and a surplus…
Why banks are not lenders as such?
According to the popular way of thinking the subject matter of lending is banking activity. It is banks, so it is held that…
Why US productivity data is questionable
According to the US Labor Department, workers productivity in the non-farm sector increased at an annual rate of 1.4% in the fourth quarter…
Expectations and economic growth
In various writings, Milton Friedman argued that there is a variable lag between changes in money supply and its effect on real output…
Why more money can’t generate economic growth?
The view that more money can revive an economy is based on the belief that money transmits its stimulatory effect through aggregate expenditure….