Debt, Deficits and the Cost of Free Lunches
byIt seems that every generation or two, fundamental economic ideas are questioned and challenged. The reasonable and important idea that governments should balance their…
Economics
Mises on 100-Percent Reserve Banking
byBy Edward W. Fuller Economists debate whether Ludwig von Mises advocated free banking or 100 percent reserve banking. This debate is significant. Mises states, “the…
Making sense of correlations in economics
byOften we observe that two pieces of data, which are not supposed to have any relationship, appear to have very high visual correlation….
Statistics and the facts of economic reality
byThe government’s releases of various economic indicators such as GDP, CPI and unemployment receive wide coverage in the media. In a measured and…
Forget velocity of money circulation
byIf there is one concept that illustrates the difference between a top-down macro-economic approach and the reality of everyday life it is the velocity…
Paul Krugman’s Predictions about “Austerity” Aren’t Aging Well
byPaul Krugman’s arguments do not fare well against evidence in a new book written by economists Alberto Alesina, Carlo Favero, and Francesco Giavazzi titled,…
Is deflation about general decline in prices?
byFor most experts deflation is bad news since it generates expectations for a decline in prices. Because of this it is held, consumers…
The balance of payments myth
byIn March, the US trade account balance stood at a deficit of $50 billion against a deficit of $49.28 billion in February and a…
Should the Fed tamper with the quantity of money?
byMost economists are of the view that a growing economy requires a growing money stock, because economic growth gives rise to a greater…
The essence of goods prices determination
byWhy do individuals pay much higher prices for some goods versus other goods? The common reply to this is the law of supply…