Economics Questions

Re: Criticisms of Austrian Economics

nirgrahamUK — Thu, 26 Aug 2010 18:01:14 GMT

Lee Kelly:
Caleb,

Advocating expansionary monetary policy in response to an excess demand for money is not the same thing as advocating bank bailouts. By maintaining an environment of monetary equilibrium, some businesses may survive that otherwise would have failed. However, genuine malinvestments, and banks that continue to be insolvent or illiquid, should not be preserved by government action. If you do not understand why these two cases are different, then you probably do not understand half of what me and Horwitz are writing about in that post you linked.

I'm eternally puzzled why a rise in the demand for purchasing power on behalf of market participants can best be satisfied by interventionist policy of redistributing purchasing power and diminishing it... rather than by the voluntary market process that would result in increasing the purchasing power of units of the money commodity....

Re: Criticisms of Austrian Economics

DD5 — Thu, 26 Aug 2010 15:48:26 GMT

Lee Kelly:
Advocating expansionary monetary policy in response to an excess demand for money is not the same thing as advocating bank bailouts.

Except that you can't advocate such an expansion without also advocating for the Fed to increase the banks reserves by creating new money. That's a free gift in my book.

Lee Kelly:
Advocating expansionary monetary policy in response to an excess demand for money is not the same thing as advocating bank bailouts.

That this "policy" is reduced down to a simple monetary aggregate rule; keep MV constant, doesn't strike you in any way as odd? It seems that you found one commodity (and what a commodity it is) that doesn't suffer from the knowledge problem.

Re: Criticisms of Austrian Economics

Modus Tollens — Thu, 26 Aug 2010 15:06:29 GMT

Caleb,

Advocating expansionary monetary policy in response to an excess demand for money is not the same thing as advocating bank bailouts. By maintaining an environment of monetary equilibrium, some businesses may survive that otherwise would have failed. However, genuine malinvestments, and banks that continue to be insolvent or illiquid, should not be preserved by government action. If you do not understand why these two cases are different, then you probably do not understand half of what me and Horwitz are writing about in that post you linked.

Re: Criticisms of Austrian Economics

chloe732 — Thu, 26 Aug 2010 06:50:34 GMT

Jonathan M.F. Catalan:
1. Bryan Caplan, Why I am not an Austrian Economist.

I think there are some relevant links here related to Caplan, and perhaps other useful links...you will need to page down to the "answer" section...

Rebuttals to Criticisms of Austrian Economics

Re: Criticisms of Austrian Economics

Caley McKibbin — Thu, 26 Aug 2010 06:06:25 GMT

Funny...

Re: Criticisms of Austrian Economics

Modus Tollens — Wed, 25 Aug 2010 22:56:39 GMT

Caley McKibbin:
I remember you agreeing with Horwitz that the Fed should bail out banks.

I have never advocated bank bailouts, and I'm quite sure Stever Horwitz hasn't either.

Re: Criticisms of Austrian Economics

Caley McKibbin — Wed, 25 Aug 2010 16:05:44 GMT

Sometimes my objection to a particular application of ABCT is mistaken as a criticism of ABCT in principle and much confusion results.

I remember you agreeing with Horwitz that the Fed should bail out banks.

Re: Criticisms of Austrian Economics

Modus Tollens — Tue, 24 Aug 2010 23:40:41 GMT

Hi Jon,

Perhaps a distinction should be made between criticisms of ABCT in principle and of its application.

One may acknowledge that ABCT is coherent and descriptive of possible events. However, one may object to ABCT being used to describe a particular historical episode, such as the ongoing recession.

I bring this up because it is the position I find myself in. Sometimes my objection to a particular application of ABCT is mistaken as a criticism of ABCT in principle and much confusion results.

Re: Criticisms of Austrian Economics

Jonathan M. F. Catalán — Tue, 24 Aug 2010 23:23:22 GMT

Nirgraham,

Thanks, I had forgotten about the capital reswitching debate (or the cambridge capital controversy). I will have to add that to the list later.

Ziragt,

Ah ok, if it's not available online I won't cite it.

Re: Criticisms of Austrian Economics

ziragt — Tue, 24 Aug 2010 23:05:03 GMT

Murphy's paper is not online, so I won't post it here. E-mail him for it.

Lachmann also has a commentary on that debate in Expectations and the meaning of institutions.

Re: Criticisms of Austrian Economics

EconomistInTraining — Tue, 24 Aug 2010 21:53:23 GMT

It's available somewhere in .pdf form, I'll send you a message with the link if I find it.

Re: Criticisms of Austrian Economics

nirgrahamUK — Tue, 24 Aug 2010 21:29:26 GMT

I found this relating to Sraffa; its relatively 'heavy'

http://www.auburn.edu/~garriro/garrison.pdf

its from the website http://www.auburn.edu/~garriro/articles.htm

Re: Criticisms of Austrian Economics

Jonathan M. F. Catalán — Tue, 24 Aug 2010 19:29:29 GMT

Can you link to this?

Re: Criticisms of Austrian Economics

ziragt — Tue, 24 Aug 2010 19:25:57 GMT

Murphy also has an unpublished paper on the Hayek-Sraffa debate. In it, he concedes Sraffa's general point on interest and takes a middle position in the debate.

Re: Criticisms of Austrian Economics

Jonathan M. F. Catalán — Tue, 24 Aug 2010 19:03:07 GMT

Giant Joe,

5) This might be related... Murphy contra Sraffa: http://mises.org/daily/1486

Thanks, I forgot about that criticism of Sraffa (although, it has more to do with a criticism of Sraffa's book, rather than a defense of Hayek).

______________

Economistintraining,

Thanks, I totally forgot about Cowen. Now, if only that book was cheaper than $40.