Survey Non-Response The purpose of this post is to address the concepts and issues behind non-responses in the survey. When economists or any researchers are collecting data for an academic or statistical study, non-response is becoming a more prevalent issue. Hence data collection needs to adapt to societal changes to maintain a level of academic… Continue reading Statistical Surveys and Non-Response Errors
Central banks pursue a policy of money neutrality. Except when they are seeking a monetary policy to steer the economy. Money neutrality means money has no impact on the workings of supply and demand in the real sector. That is, money is just a veil or a cloak. Money’s influence and function are to serve… Continue reading Can Money be Neutral?
The natural rate of interest is a rate of interest is a rate of interest that exists in natura, that is, if there were no use of money. The Wicksellian marginal productivity on capital in a barter economy. This posts looks at the significance of multiple natural rates and offers one avenue to pursue for… Continue reading Multiple Natural Rates of Interest – Pierro Straffa
Free banking compared to Central Banking Free banking is money that is issued by free-market private banks with minimal regulation and clear market rules in a competitive environment. Free banking has worked throughout history, yet for ideologically derived and fiscal expansion reasons it is jettisoned for government-controlled money. The idea is a few intellectuals know… Continue reading Free Banking as an Alternative to the Federal Reserve
Laissez-faire is an economic philosophy that literally translates to ‘let do’ or ‘let go.’ It generally means ‘leave it alone’ in reference to economic policy. Laissez-faire is an import word from the French because the genesis of modern economic thought connected to these ideas was physiocrats in the 18th-century. However, these ideas go back to… Continue reading The Real Meaning of Laissez-Faire
Inflation is a monetary phenomenon. Inflation can be defined as an aggregate increase in the prices or a decrease in the purchasing power of money. A price level change can be sustained or temporary. Inflation is sustained. Increases in the price level from exogenous shocks do not continue to increase prices generally. In contrast, when… Continue reading What are the Causes of Inflation?
I often ask my class to compare the Keynesian explanation for the business cycle compared to a monetary or Austrian explanation of a business cycle. I am primarily looking for the theory, rather than policy recommendations. I am looking for objectivity and positive economic analysis. Here are my class notes summarized in pdf. If you… Continue reading Keynesian vs. Austrian Business Cycle Theory – Explained
Knut Wicksell developed a model for understanding price movements based on the divergence of the observed bank rate of interest and marginal productivity of capital or let us say the profit rate. variations of this idea were developed by the Austrian school of economics to explain business cycles. That is disequilibrium in the monetary markets… Continue reading Wicksell expectational business cycle model
I believe the heart of the misunderstandings about economic justice and fairness is a misunderstanding about what a price is. Many people on all sides of the political spectrum have passionate views about economic justice and what this represents? It determines who to vote for and how the economy should develop. The central question is… Continue reading Cost based pricing vs. Value based pricing – How naive are you about economic justice?
Do not read journalist’s critiques of Mitt Romney’s economic plan by papers like the New York Times or the Huffington Post. They will only give you partial gobbledygook. Read my critique of he economics of Mitt Romney. In one clear, crisp concise statement ‘Romney is free market but uses economic incentives to encourage productivity and… Continue reading Mitt Romney’s economic plan