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2024-03-01
As Austrian Business Cycle Theory explains, big-ticket capital expenditures are heaving influenced by interest rates, as we discussed here.Since housing is a big-ticket capital expenditure, demand for housing is strongly influenced by interest rates, which makes it an excellent leading indicator of the business cycle.
2024-02-29
Tu ne cede malis, sed contra audentior ito
Website powered by Mises Institute donors
Mises Institute is a tax-exempt 501(c)(3) nonprofit organization. Contributions are tax-deductible to the full extent the law allows. Tax ID# 52-1263436
2023-12-04
Paul Krugman can’t figure out why everybody is so bummed about the economy. From his perspective, we should all be jumping for joy, praising Joe Biden, and publicly signing fifty-year commitments to vote Democrat. Official statistics show that “unemployment is still near a 50-year low, yet inflation has been falling fast.” But the ignorant masses simply won’t get with the picture. Krugman admits “surveys of consumer sentiment and political polls continue to show that Americans have a very negative view of the Biden economy.”
He concludes that it is partisanship and media bias driving a wedge between consumer sentiment and economic reality. He found a study that shows that 30 percent of the disparity can be explained by Republicans who are doing fine economically but are just mad that Biden
2023-12-01
The 2024 campaign is underway, and that means new efforts by politicians to pander to economic nationalists and protectionists by calling for new trade wars and trade controls. This will surely happen even though the Biden Administration has done very little to reverse the protectionist policies that Donald Trump imposed during his term. For example, new so-called "Section 301" tariffs, which have been in place since 2018, are still in effect and are only now being "reviewed." In response to a possible change to these new trade barriers, a bipartisan group of legislators has already called on Biden to keep these taxes in place. Moreover, candidate Trump, now campaigning for 2024 has recently called for an additional 10-percent tariff (i.e., tax) on all imports.
Politicians who support
2023-11-30
Dorothy and her companions in the movie The Wizard of Oz feared lions and tigers and bears as they journeyed through the woods to visit the wizard. But real people living today might fear frighteningly large numbers more than large wild animals.
We live today with some very large numbers that contain many zeros and commas, figures so large that the human brain can barely comprehend them. With so many zeros to count, it is often easier to express these figures simply in words, such as a billion or a trillion. But expressing them with their many zeros and commas more aptly conveys their enormity.
How Much Is a Million?
We used to think that a million dollars was a very large sum of money. Now, depending on the context, it seems that a million dollars is chicken feed or a rounding error, and
2023-11-30
Many economists believe that inflationary expectations cause general increases in prices. For instance, if there is a sharp increase in oil prices, people will form higher inflationary expectations that set in motion general increases in the prices of other goods and services. According to the former Federal Reserve chairman Ben Bernanke, “Undoubtedly, the state of inflation expectations greatly influences actual inflation and thus the central bank’s ability to achieve price stability.”
Economists believe that if expectations could be made less responsive to various shocks, then over time this would mitigate the effects of these shocks on the momentum of the prices of goods and services. Many economic commentators think that central bank policies can bring inflationary expectations to a
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