Daily economy news from the American Institute for Economic Research: data, stories, research, and articles touching on economics, politics, culture, education, policy, opinion, technology, markets, healthcare, regulation, trends, and much more.

AIER’s Editorial Policy.

Business Conditions Monthly August 2023

“As social scientists we remain alert for and open to cogent, economically-sound and well-reasoned hypotheses pertaining to the current state of the economy. Presently, though, our expectation of a US recession on or before August 2024 remains undeterred.” ~Peter C. Earle

You’re No Einstein, Einstein  

“While he does seem to have intuited that socialism increased the dangers of authoritarian government, he doesn’t seem to have fully grasped that what he sought were two goals in fundamental tension.” ~James A. Hanley

Why is Baby Formula Kept Under Lock and Key?

“Patent restrictions, a deliberate oligopoly, protectionist tariffs, and the highest inflation in four decades have resulted in an extremely expensive product at the end of a frangible production process and supply chain.” ~Peter C. Earle

Inflation was Worse than We Thought

“Although Fed officials were late to tighten monetary policy, their efforts over the last year appear to have worked. The risk today is that monetary policy is too tight—and will remain so for too long.” ~William J. Luther

How Crazy Do You Have to Be to Support Dollarization?

“The whole reason why it is an advantage for a developing country to tie to a major country is that historically speaking the internal policies of developing countries have been very bad. US policy has been bad, but their policies have been far worse.” ~Nicolás Cachanosky

Wishful (Protectionist) Thinking 

“Specialization and productivity increase when the market’s size extends across national borders. But tariffs reduce the extent of the market and thereby reduce specialization.” ~Paul Mueller

Weighing Whether the Standard Scale Makes Sense

“Largely thoughtless adoption of a grading scale inherited from primary school can increase the emphasis on rote instead of reason at the university level.” ~Gary M. Galles

What Should the Federal Reserve Do Now?

“Inflation is running above 2 percent by any measure, and a current temporarily higher rate on short-term securities can reassure markets that the Federal Reserve is aiming at a lower inflation rate.” ~Gerald P. Dwyer

Another Rate Hike? Let’s Not

“Interest rate and liquidity data point to the same conclusion: monetary policy is sufficiently tight. Further tightening could cause a painful economic contraction.” ~Alexander W. Salter

How To Be Accidentally Right, Central Banking Style

“Money is broken, and while these activists might not be able to explain how, they’re not wrong in pointing their fingers at the monetary authority at the center of it all.” ~Joakim Book

Taxation as Social Justice

“The goal is not to raise revenue so we can support the poor; instead, the US is pursuing the simpler goal of eliminating private concentrations of wealth.” ~Michael Munger

Business Conditions Monthly August 2023

“As social scientists we remain alert for and open to cogent, economically-sound and well-reasoned hypotheses pertaining to the current state of the economy. Presently, though, our expectation of a US recession on or before August 2024 remains undeterred.” ~Peter C. Earle

You’re No Einstein, Einstein  

“While he does seem to have intuited that socialism increased the dangers of authoritarian government, he doesn’t seem to have fully grasped that what he sought were two goals in fundamental tension.” ~James A. Hanley

Why is Baby Formula Kept Under Lock and Key?

“Patent restrictions, a deliberate oligopoly, protectionist tariffs, and the highest inflation in four decades have resulted in an extremely expensive product at the end of a frangible production process and supply chain.” ~Peter C. Earle

Inflation was Worse than We Thought

“Although Fed officials were late to tighten monetary policy, their efforts over the last year appear to have worked. The risk today is that monetary policy is too tight—and will remain so for too long.” ~William J. Luther

How Crazy Do You Have to Be to Support Dollarization?

“The whole reason why it is an advantage for a developing country to tie to a major country is that historically speaking the internal policies of developing countries have been very bad. US policy has been bad, but their policies have been far worse.” ~Nicolás Cachanosky

Wishful (Protectionist) Thinking 

“Specialization and productivity increase when the market’s size extends across national borders. But tariffs reduce the extent of the market and thereby reduce specialization.” ~Paul Mueller

Weighing Whether the Standard Scale Makes Sense

“Largely thoughtless adoption of a grading scale inherited from primary school can increase the emphasis on rote instead of reason at the university level.” ~Gary M. Galles

What Should the Federal Reserve Do Now?

“Inflation is running above 2 percent by any measure, and a current temporarily higher rate on short-term securities can reassure markets that the Federal Reserve is aiming at a lower inflation rate.” ~Gerald P. Dwyer

Another Rate Hike? Let’s Not

“Interest rate and liquidity data point to the same conclusion: monetary policy is sufficiently tight. Further tightening could cause a painful economic contraction.” ~Alexander W. Salter

How To Be Accidentally Right, Central Banking Style

“Money is broken, and while these activists might not be able to explain how, they’re not wrong in pointing their fingers at the monetary authority at the center of it all.” ~Joakim Book

Taxation as Social Justice

“The goal is not to raise revenue so we can support the poor; instead, the US is pursuing the simpler goal of eliminating private concentrations of wealth.” ~Michael Munger