by Edward Chancellor* China’s economy has long defied the doom-mongers. In place of their ominous critique, a more constructive view of economic management in the People’s Republic has surfaced. Beijing, we are told, has found the right balance between state and market forces, and is best positioned to exploit exciting new technologies, such as big … Continue reading China’s Great Wall of Debt, Dinny McMahon, Houghton Mifflin Harcourt, 288 pp.
by Liya Palagashvili A couple months ago, a judge ruled in favor of Seattle’s ordinance that will allow ridesharing drivers to engage in collective bargaining agreements. The ordinance has granted the labor union, Teamsters, the right to represent drivers for companies such as Uber and Lyft. Under current U.S. labor laws, the National Labor Relations … Continue reading Rigidity and Flexibility: Unions in the On-Demand Economy?
by Stefan Kolev I am grateful for the valuable comments by Peter Klein and Joseph Salerno at the Ludwig von Mises Institute to my previous post on Friedrich von Wieser and the historiography of the Austrian School. Some lines of clarification seem necessary. My plea certainly did not aim at “homogenizing” the Austrians, quite on … Continue reading “Sidelining” Austrian Economists: A Reply to Klein and Salerno
by Stefan Kolev Historians of economics must resist the temptation to put their narratives into the service of ideology. The intriguing case of Friedrich von Wieser exemplifies the grave dangers involved for history of economics as a discipline and for Austrian economics as a respectable research program – but it also provides hints on how … Continue reading Friedrich von Wieser, or: Against “Sidelining” Austrian Economists
by Edward Chancellor The collapsed UK construction firm’s problems may look idiosyncratic. But its problems with “onerous contracts” were exacerbated by a balance sheet stuffed with intangible assets and ultimately shaky assumptions. These issues are not peculiar to Carillion. Large corporate failures provide interesting insights into what’s been going on in the business world. Enron, … Continue reading Bankrupt(cy) Thoughts: Carillion’s Flaws Are Common to Many
by Gunther Schnabl The European Central Bank will increase the overall volume of its bond purchase program to 2,550,000,000,000 euros by September 2018. The main refinancing rate will remain at zero. Mario Draghi has stressed that this policy shall continue until inflation picks up sustainably (which is unlikely to happen in the foreseeable future). The … Continue reading Hayek’s Work Helps Explain the Link between Ultra-loose Monetary Policy and Political Instability
I would like to bring the following to your attention: – Call for Papers – Workshop on the Future of the EMU Leipzig, Germany May 30, 2018 The Institute for Economic Policy at Leipzig University invites submissions for the international workshop on the Future of the European Monetary Union. The workshop will take place at … Continue reading Workshop on the Future of the EMU
by Andreas Hoffmann and Sebastian Müller The financial crisis of 2007 eroded the public confidence in financial markets. Many people have come to believe that only the government can guarantee the stability of financial markets. Responding to increased public demand, politicians from across the political spectrum support additional "macroprudential regulation". However, little is known about … Continue reading Two Cheers for Placebo-Regulation
ThinkMarkets got a facelift in 2017 and there were lots of new posts. Some posts have received more attention than others. Below you find the most popular new posts of 2017: Richard Thaler's Nobel Prize David Rockefeller as an Economist 200 Years of the Theory of Comparative Advantage A Crisis in Economics? An Axiomatic Case … Continue reading Most Popular Posts of 2017
by Taiki Murai and Gunther Schnabl Similar to the credit unions in the US, the goal of the Japanese Shinkin banks is the promotion of the sound development of the regional economy. The members of these non-profit cooperatives are small- and medium-sized enterprises as well as natural persons from the respective regions of Japan. The … Continue reading The Japanese Shinkin Banks Turn Away from the Regional Economy
by Sebastian Müller and Gunther Schnabl Massive losses for Germany’s former catch-all parties (CDU/CSU and SPD) and record gains for the far-right Alternative for Germany (AfD) have caused turmoil in Germany’s political landscape. The tumbling leaders Angela Merkel and Martin Schulz keep affirming that good policies were simply not explained sufficiently. They blame globalization and … Continue reading The European Central Bank Drives the Political Polarization in Europe
High-speed broadband networks are key to the growth of digital markets as well as most modern forms of communication, and have been subject to far-reaching regulation in many countries. In this piece, we’ll review the rationale behind a cornerstone of the prevailing regulatory paradigm: forced access to incumbent operators’ network infrastructure by alternative operators on … Continue reading A Critical Appraisal of Network Unbundling
by Andreas Hoffmann Stefan Kolev and I run a new colloquium at Leipzig University. This "Colloquium on the Foundations of the Market Order" provides an opportunity for academics interested in the principles of the market economy and a free society to meet and discuss research. Several participants of the colloquium contribute to this blog. Yesterday … Continue reading The Leipzig Colloquium
by Mario Rizzo Richard Thaler has won the Nobel Prize for initiating the behavioral moment in economics. My view of the Nobel Prize in economics is much like Time magazine’s view of its “Person of the Year.” It is awarded to the economist who "for better or for worse... has done the most to influence” … Continue reading Richard Thaler’s Nobel Prize
by David Herok and Andreas Hoffmann* Since the financial crisis, trust in the European Central Bank (ECB) has declined substantially among Europeans. We argue that the decline in trust is worrisome and can be both a cause and a consequence of the ECB’s policy failure. All modern monetary systems are based on trust. Since central … Continue reading Why Europeans Lost Trust in the ECB
by Jerry O'Driscoll* The U.S. economy has been growing slowly but steadily since the trough of the Great Recession in June 2009. Deep recessions are typically followed sharp recoveries. Not so this time. More recently, there is the mystery of low inflation. The Fed’s preferred inflation measure, the core PCE index, has consistently fallen short … Continue reading Fed Policy and Velocity’s Dance
Check out: PPE.Life It is a new blog by students in the PPE master’s program at the CEVRO Institute in Prague, Czech Republic. Prague's PPE program is exciting. I taught there in the spring and met many great students with an interest in liberty and market solutions. The blog has been up and running for … Continue reading PPE Blog & Interview
by Jerry O'Driscoll* For many years, pundits have been predicting the demise of cash for payments. Currency is bulky, dirty, subject to theft, etc. Making change at the point of payment is time consuming. The rise of e-commerce will surely bring about the demise of cash. Cash is passé. Nothing could be further from the … Continue reading The Truth about Cash
by Gunther Schnabl* The European Central Bank (ECB) continues buying securities. By the end of 2017, the balance sheet is expected to have further grown by about 800 billion euros. This corresponds to a growth rate of 20 percent per year, while real growth of the euro area is expected to be only 1.5 percent. … Continue reading Inflation Is Not Measured Correctly
by Andreas Hoffmann and Nicolás Cachanosky The Federal Reserve’s (Fed) and European Central Bank’s (ECB) policy responses to the recent financial disasters offer two tales of unintended consequences. Our previous post outlined undesired effects of the Fed’s policies. In this post, we suggest that the ECB’s stabilization policy did not only fail to achieve its … Continue reading Unintended Monetary Policy Effects – Tale II: ECB Crisis Policies
by Taiki Murai and Gunther Schnabl[*] In the second half of the 1980s, 13 Japanese city banks climbed into the group of the world's largest banks, boosted by a domestic speculation boom. With the bursting of the Japanese financial “bubble” in the early 1990s, a gradual decline followed. Since then, the Japanese city banks have … Continue reading The Bank of Japan Creates a State-Led Monopolistic Banking System
by Sandy Ikeda Jane Jacobs’ writings span several disciplines—including ethics and most especially economics—but she is best known for her contributions to and her critique of urban planning, design, and policy. Many of those whom she influenced in academia, policy, and activism took the occasion of her one-hundredth birthday in 2016 to celebrate those contributions … Continue reading COSMOS + TAXIS Issue on Jane Jacobs
by Andreas Hoffmann The pre-crisis Jackson Hole Consensus view on how to take asset market developments into account in monetary policy can be summarized as follows: Because it is hard to spot bubbles in asset markets with certainty ex-ante, central bankers should not lean against the wind when there seems to be a boom in … Continue reading Should Central Banks Lean Against the Wind?
by Mario Rizzo Periodically, people warn about the “crisis in economics.” I have heard about several of these over my professional career. Somehow the mainstream or orthodox economists never seem to notice these crises or take them seriously. They continue doing what they were doing. Today the crisis, if there is one, is due to … Continue reading A Crisis in Economics?
I'd like to draw your attention to the following opportunity: Call for Research Proposals IREF is a free-market oriented think tank based in France. It promotes ideas, debates, events, and rigorous academic research. With regard to research, IREF supports original research projects that lead to the production of papers of academic quality of at least … Continue reading IREF Research Support