Steve Landsburg is an economics professor at the University of Rochester, and author of some great books on free-market thinking. However, in a recent blog post he gave a misleading explanation of option pricing. It’s worth going over the episode because it beautifully illustrates the tendency of economists to overlook the assumptions they sneak
It’s not newsworthy when Paul Krugman contradicts himself. However, in two recent blog posts on the varying economic fortunes of US states, Krugman’s about-face was so complete and so fast that I just have to share. Krugman’s Kind of Contradiction At the outset I should note that Paul Krugman is a very clever, careful guy. It’s extremely rare when
The news abounds with arguments and even riots over so-called austerity measures. Whether in the Middle East, Europe, or even certain US states, the public is realizing just how deep a hole various governments have dug for themselves. In this article I’ll outline Uncle Sam’s position and then explain why it’s such a problem. A Shocking Chart I
The political upheaval in the Middle East underscores one of the most profound aspects of Ludwig von Mises’s worldview: all governments ultimately rely on the consent of the governed. Although the claim at first sounds preposterous — who could possibly argue that a dictatorship is subject to the will of the people? — there is an important sense in
Whether giving public lectures or teaching at the Mises Academy , I’m often asked whether Bernanke will be able to “pull this off.” Specifically, can the Fed gracefully exit from the huge hole it has dug for itself? Unfortunately my answer is no. In the present article I’ll go over three possible exit options, and explain the flaws in each. The
Everyone knows that the unemployment situation is very bad, but the official figures (not surprisingly) understate the problem. In this article I’ll outline the severity of the stalled labor market, and explain some of the major causes. The Employment Outlook According to the Bureau of Labor Statistics (BLS), the official civilian unemployment
As YouTube and other digital media move beyond computer-savvy young people into the ranks of even stodgy businessmen, these subversive outlets become serious problems for the ruling elite. This trend is epitomized by the radical change in the Federal Reserve’s image. In just a few short years, the Fed has transformed in public opinion from a
After the catastrophic earthquake, the tsunami, and the nuclear-reactor scares, the Japanese currency ironically strengthened quite sharply. In response, the Bank of Japan and other major central banks last week launched a coordinated “intervention” into the currency markets in order to intentionally weaken the yen. In this article I’ll explain
Five months into the second round of quantitative easing — “ QE2 “ — it is useful to take stock of what it has, and has not, accomplished. In short, the monetary base is way, way up, price inflation is up, long-term interest rates are up, and bank lending is down . QE2 has thus begun to deliver on all the dangers of which the critics warned, but
A humorous financial story making the rounds concerns the apparent relationship between media mentions of the actress Anne Hathaway and jumps in the stock price of shares of Warren Buffett’s Berkshire Hathaway. The presumed culprits are algorithmic trading programs, which raises the question, What does Austrian economics have to say about
What is the Mises Institute?
The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.