Where do Interest Rate Come from?

Frank Fetter was the great American Austrian who devoted a fantastic part of his professional life to arguing on behalf of the pure time preference theory of interest. His work is lucid and powerful, and largely would have been forgotten if Murray Rothbard had not assembled this excellent volume of his writings. It supports the Misesian case in every detail, and set it against the productivity theory and other false notions of interest...more>>

Inflation and Unemployment II

This post from earlier today noted that there is evidence that the relationship between inflation and measures of real activity such as the unemployment rate has weakened in the last twenty-five years. I want to return to this topic because I think two different questions are being mixed up in some of the discussion surrounding this result...more>>

Behavioral Economics and Economies of Scale

Via Greg Mankiw, we have this from Jane Galt:

....behavioural economics, which the left seems to believe is a magical proof of the benevolence of government intervention, because after all, people are stupid, so they need the government to protect them from themselves. My take is a little subtler than that:

1. People are often stupid.
   
2. Bureaucrats are the same stupid people, with bad incentives...more>>

What is meant by Economic schools of Thought

Very roughly speaking, each school of thought differs by the set of economic phenomena they wish to explain, the economic methodology used, and the assumptions (either explicit or implicit) used in order to explain those economic phenomena...more>>

Hyperinflation example

Mankiw: I talked about hyperinflation in my Ec 10 lecture last week. In today's NY Times, we can read about a modern example in Zimbabwe:...more>>>