Category Archive: 6b.) Mises.org

Economic fluctuations, also known as business cycles, are seen as being driven by mysterious forces that are difficult to identify. Finn Kydland and Edward C. Prescott (KP), the 2004 Nobel laureates in economics, decided to attempt to find out what these forces were.1 They hypothesized that technology shocks are a major factor behind economic fluctuations and demonstrated that a technology-induced shock can explain 70 percent of the fluctuations in...

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The coronavirus is reminding everyone that you cannot rely on government and that ultimately it is the private sector that will provide the solutions. Many nonmedical government officials and members of the media are predicting massive cases of COVID-19 and death, when in fact no one can predict the outcome.

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To read or watch the news in today's world is to be confronted with a wide array of stories about financial organization and financial institutions. News about central banks, interest rates, and debt appear to be everywhere.

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The money supply growth rate rose again in February, climbing to a 37-month high. The last time the growth rate was higher was during February of 2017, when the growth rate was 7.9 percent. During February 2020, year-over-year (YOY) growth in the money supply was at 7.49 percent. That's up from January's rate of 6.32 percent, and up from February 2019's rate of 3.20 percent.

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There’s a lot to be said regarding the Fed’s surprise announcements—including its Sunday surprise of $700 billion in renewed QE and the complete elimination of all reserve requirements for banks—but here let me just focus on one element: the tendency for Fed officials and all the pundits to treat injections of “liquidity” as if they don’t count as much when distorting the economy.

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Modern monetary theory, or MMT, has been getting a lot of attention lately, often celebrated as a revolutionary breakthrough. However, there is absolutely nothing new about it. The very basis of the theory, the idea that governments can finance their expenditures themselves and that therefore deficits don’t matter, actually goes back to the Polish Marxist economist Michael Kalecki (1899–1970).

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This is how the budget process in Washington begins. Step one: the president submits his budget to Congress. Step two: Congress puts the president's budget in a drawer somewhere and forgets about it. Step three: Congress passes a budget it likes instead.

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Medicare for All is listed as the top priority of Democratic presidential candidate Bernie Sanders. He describes it as a single-payer system that is “free at the point of service” as there will be no premiums, deductibles, copays, or surprise bills. It will cover more services (dental, hearing, vision, long-term care, substance abuse treatment, etc.) than what the present Medicare system covers. It will also stop the “pharmaceutical industry from...

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[This article is part of the Understanding Money Mechanics series, by Robert P. Murphy. The series will be published as a book in late 2020.] In addition to the Keynesian perspective (covered in chapter 14), a relatively new challenge to the Austrian framework comes from the “market monetarists” and their endorsement of a central bank policy of “level targeting” of nominal gross domestic product (sometimes abbreviated as NGDPLT1).

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