History of Economic Thought

Friday, August 17th, 2018

There is a core of the economic way of thinking that can be traced from Adam Smith to Vernon Smith and that deals with basic ideas about human rationality, human sociability, and the coordination of activity through time. Incentives, information, and innovation are part of this core as they derive from the even more primordial ideas of property, prices, and profit-and-loss accounting.

Saturday, August 11th, 2018

Every activist political movement eventually becomes a caricature of itself. This is certainly true of the so-called alt-right that blasted onto the cultural stage with its “Unite the Right” rally in Charlottesville, Virginia, in 2017.

Thursday, August 9th, 2018

Fascism often is discussed as though it were the opposite of communism, but such is not precisely the case. Hitler, Mussolini, and Stalin were different in many respects; but the principles of their economic ideologies were the principles of socialism; their initial appeal was to the underprivileged; and the final result, a new despotism, was the same in all three instances.

Monday, July 23rd, 2018

Fifty years ago, in 1968, Austrian (and Austrian school) economist Friedrich A. Hayek published a monograph called The Confusion of Language in Political Thought. Hayek argued that the words we use and the meanings we give to them greatly influence how we think about the political system and the wider social order in which we live. This is no less so, I would suggest, in the language and the meanings of words used in economics.

Monday, July 9th, 2018

There has been a great paradox in the modern world. On the one hand, freedom and prosperity have replaced tyranny and poverty for tens, indeed for hundreds of millions of people around the world over the last two centuries. Yet the political and economic system that historically has made this possible has been criticized and condemned. That political and economic system is liberalism.

Sunday, July 8th, 2018

You think ideas don’t matter, that intellectuals aren’t really relevant to the shape of the modern world? Read some of these tributes and you will see otherwise. Mario Rizzo is for the ages.

Sunday, May 27th, 2018

The equation of exchange provides building blocks for understanding the dynamics of the market for money.

Tuesday, May 22nd, 2018

The once-dead Phillips curve has come back to life. But its underlying argument is still dead wrong.

Thursday, May 17th, 2018

Many models in macroeconomics ignore money. A new paper by Ricardo Lagos and Shengxing Zhang suggests that is a mistake.

Saturday, April 28th, 2018

Economists bade farewell to Leland Yeager, one of the greatest monetary thinkers of the 20th century, earlier this week.

Friday, April 20th, 2018

Following the financial crisis and Great Recession, many bloggers (and some economists) have expressed disappointment with the state of macroeconomics. Randall Wright offers a more optimistic perspective.

Tuesday, April 17th, 2018

The fact that Anderson’s theory of money seems to fail the Bitcoin test forces us to question our long tradition of issuing new coins that contain precious metals, or banknotes redeemable for some other, already valuable instrument.

Monday, April 16th, 2018

If macroeconomists do not want to take responsibility for crises, then they should refrain from endorsing unstable monetary institutions.

Thursday, April 5th, 2018

In a recent Econometrica article, Matthias Doepke and Martin Schneider model money as a standardized unit of account.

Wednesday, April 4th, 2018

The inability of Hayek and other scholars to join forces against Keynes’s supposed innovations arguably contributed to Keynes’s victory among academics in the immediate post-war period.

Saturday, March 31st, 2018

Economists have modeled some, but not all, of money’s functions.

Wednesday, March 21st, 2018

Liberalism believes that society manages itself better than any top-down authority can. That includes the commercial life of a nation. But it also pertains to civil liberties, international relations, migrations, family and cultural life, and religion. And what does classical liberalism oppose? Managed economies, imperialism, ethnic cleansing, war, arbitrary rule, dictatorship, authoritarianism, and every action of government that goes beyond what is absolutely necessary, if any government is necessary at all. That the meaning of the term changed in the US in the first half of the 20th century is one of the most tragic language distortions on record.

Monday, March 5th, 2018

A plucking up of unemployment is followed by a return down with the same magnitude. But a decline in unemployment does not precede a rise of the same magnitude.

Monday, February 5th, 2018

A phenomenon known as the Replication Crisis is challenging the seemingly unquestionable authority and accuracy that a published study in the natural sciences is expected to have, inviting the question as to whether economists should aspire to the standards of natural scientists or to something better.

Tuesday, January 30th, 2018

Austrian ideas are ripe for introduction into mainstream macroeconomics. But there is still a lot of work that needs to be done.

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