Modern economics in addition to sophisticated mathematics also employs probability distributions. What is probability? The probability of an event is the proportion of times the event happens out of a large number of trials. For instance, the probability of obtaining heads when a coin is tossed is 0.5. This does not mean that when a coin is tossed
On Friday February 9, 2018, the Dow Jones Industrial Average closed at 24,190.9 a decline of 1,958.49 points from the end of January 2018 or a decline of 7.5%. The S&P500 fell during this period from 2,823.81 to 2,619.55 – a decline of 7.2%. Most commentators are trying to assure stock market participants that this correction is normal by drawing
On Thursday March 1, the Trump administration announced plans to impose 25% tariffs on imports of steel and 10% tariffs on imports of aluminum. The US President is of the view that without the required protection, the US steel and aluminium industries are likely to follow the deteriorating path and this in turn will undermine the US labor market.
According to the popular view, a proper competitive environment must emulate the perfect competition model. In the world of perfect competition, a market is characterized by the following features: There are many buyers and sellers on the market Homogeneous products are traded Buyers and sellers are perfectly informed There are no obstacles or
It is generally held that by means of statistical and mathematical methods one can organize historical data into a useful body of information, which in turn can serve as the basis for the assessments of the state of the economy. It is also held that the knowledge secured from the assessment of the data is likely to be of a tentative nature since
Is it true that changes in money supply are an important driving force behind changes in the stock price indexes? Intuitively it makes sense to argue that an increase in the growth rate of money supply should strengthen the growth rate in stock prices. Conversely, a fall in the growth rate of money supply should slow down the growth momentum of
Most economists are of the view that by means of economic indicators it is possible to identify early warning signs regarding an upcoming recession or prosperity. What is the rationale behind this approach? The National Bureau of Economic Research introduced the economic indicators approach in the 1930’s. A research team led by W.C. Mitchell and
Prior to 1933, the name “dollar” was used to refer to a unit of gold that had a weight of 23.22 grains. Since there are 480 grains in one ounce, this means that the name dollar also stood for 0.048 ounce of gold. This in turn, means that one ounce of gold referred to $20.67. Observe that $20.67 is not the price of one ounce of gold in terms of
According to Ludwig von Mises, Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term ‘inflation’ to refer to the phenomenon that is an inevitable consequence of
For most economic commentators the underlying driving force of inflation is inflationary expectations . For instance, if there is a sharp increase in the price of oil, individuals may form higher inflationary expectations that could set in motion spiraling price inflation. Or so it is held. If expectations could somehow be made less responsive to
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.