It Began with Carl Menger: The Austrian Intellectual Triumph
2024-01-08
Near the end of the nineteenth century, the European intellectual scene witnessed a remarkable theoretical contest known as the “battle of methods,” or in German, Methodenstreit. This intellectual clash stood out due to the confrontation between the precepts of methodological and subjective individualization, equipped with a subjectivist and individualizing worldview of the method. It was represented by figures such as Carl Menger (considered the founder of the Austrian School and its theoretical bases) and the German Historical School, and it was guided by the collectivist and historicist assertions of economic science, whose exponents included Gustav von Schmoller and Lujo Brentano.
The conflict, prevalent in the 1880s and 1890s, was driven by fundamental differences regarding the
Why the Fed Sends Mixed Messages on Rate Cuts
2024-01-05
The Fed’s Federal Open Market Committee released the minutes to its December meeting yesterday, and the minutes further strengthen the view held by many Wall Street investors and observers that the Fed plans to implement rate cuts by the middle of 2024. Specifically, the most recent Fed survey of market participants "suggested that the first reduction in the policy rate would occur in June."
This contrasts only slightly with the FOMC members themselves, who, in their own internal survey (i.e., the Summary of Economic Projections,or SEP) overwhelmingly suggests a cut to the policy rate of at least 50 basis points this year. Or as the minutes put it: "almost all participants indicated that, reflecting the improvements in their inflation outlooks, their baseline projections implied that a