Economics Questions

Re: What have Austrians been wrong about?

Fool on the Hill — Thu, 01 Jan 2015 05:01:22 GMT

Everything

Re: What have Austrians been wrong about?

AJ — Mon, 21 Oct 2013 11:57:18 GMT

Here's a thread on the scarcity of air: http://archive.freecapitalists.org/forums/t/31127.aspx

Re: What have Austrians been wrong about?

fakename — Mon, 14 Oct 2013 01:57:56 GMT

The Austrian treatment of air I always found confusing: a non-scarce good is one which is superfluous regarding the fullfilment of wants and/or the production of a consumer good.

However air is considered a non-scarce good even though you do have to make a conscious effort to breath, so how can air be non-scarce unless you define scarce air as perhaps "breathable air" and non-scarce air as just potentially breathable air.

Also, if something is non-scarce does that mean it is infinite in supply? And if so, is air really infinite?

Also, I think Rothbard wrote an inadequate proof that there must always be 2 factors of production when he could simply say that by definition, 2 factors are needed to produce something since if only 1 factor were needed, then that factor would be the produced thing and the acts of consumption and production would be the same (which is impossible).

Re: What have Austrians been wrong about?

Vincent Cate — Fri, 10 May 2013 16:00:52 GMT

Yes

Re: What have Austrians been wrong about?

Jargon — Fri, 10 May 2013 11:28:18 GMT

Is your avatar you and your girlfriend/wife?

Re: What have Austrians been wrong about?

Vincent Cate — Thu, 09 May 2013 11:19:48 GMT

It just takes a few people to lose confidence. Then as they get out of bonds and buy real things the central bank monetizes more and prices go up a bit. This then causes a few more people to lose confidence. Eventually you get an avalanche and lots of lost confidence. But it does not take a lot to start the feedback loop.

Re: What have Austrians been wrong about?

Aristophanes — Thu, 09 May 2013 03:20:20 GMT

I don't deny that the possibility for hyperinflation is there, but it takes a whole lot of confidence diminishment before it will happen. There also has to be an alternative for the three international dollar-demand sources that I mentioned. Mainstream IPE scholars are more Austrian than regular economists.

Re: What have Austrians been wrong about?

Vincent Cate — Thu, 09 May 2013 03:14:43 GMT

I think I can both explain how hyperinflation will happen and also simulate hyperinflation on a computer. Nobody needs to "allow" hyperinflation or vote for it or anything like that. It is like an avalanche, once the conditions are right anything can trigger it.

http://howfiatdies.blogspot.com/2012/10/faq-for-hyperinflation-skeptics.html

http://howfiatdies.blogspot.com/2013/03/simulating-hyperinflation.html

I think Japan gets hyperinflation before the USA.

-- Vince

Re: What have Austrians been wrong about?

Jon Irenicus — Wed, 08 May 2013 17:58:17 GMT

Murphy has admitted being wrong on hyperinflation, which Krugman and DeLong like to wield over his head.

Mostly because Murphy couched it in terms of CPI, which was clumsy on his part. Schiff also gets predictions wrong sometimes. Which isn't surprising, he doesn't have a crystal ball. Few investors ever manage to systematically beat the market or predict it. People use this to discount his more long-term predictions on the health of the US economy, quite ridiculously.

1. In general? I don't think anything. There is a lot of disagreement among Austrians as to the specifics of certain advanced theories, but I don't think there is anything really wrong in the big picture.

Well, invariably one or the other side will be wrong, unless there is potential for synthesis, but I see this as healthy. Austrians don't stake a claim to infallibility. I do think that Austrianism is, however, one of the most theoretically sound schools of economics out there.

Austrians need to participate in the mainstream.

They do try but their message isn't popular.

Re: What have Austrians been wrong about?

Malachi — Wed, 08 May 2013 05:39:53 GMT

indifference isnt a real concept, its an abstraction. in the real world people only make deal when they want to, so indifference is indistinguishable from preference.

mental models like this and the concepts they rely on are only as good insofar as they give you some logic chain.

Re: What have Austrians been wrong about?

Michelangelo — Wed, 08 May 2013 05:26:01 GMT

1) It's a small thing but indifference curves. Some Austrians reject the concept of indifference; you either like A or B. One non-Austrian economist replied that if Austrians didn't believe in indifference then they couldn't simultanously believe in their own subjective-marginal theory of value since it relied on indifference. Walter Block basically responded that Austrians could believe in indifference when they wanted to (theory of value), but could choose not to accept it when they didn't want to (indifference curves).

I love Block, but the whole debate made me shake my head.

Re: What have Austrians been wrong about?

Aristophanes — Wed, 08 May 2013 05:01:48 GMT

I've never seen Austrians address how hyperinflation will happen, but from what I have studied in the field of International Political Economy it will happen only when the rest of the world ceases their participation in (1) the petro dollar system, (2) the international debt markets, and (3) the Eurodollar system.

Austrians need to participate in the mainstream. What I just laid out above is THE only way that hyperinflation will occur. And my guess is that the central banks of the world will not allow inflation to his the US all at once. It will be a gradual undoing of the US dollar standard over a twenty or thirty year period of time.

Re: What have Austrians been wrong about?

gotlucky — Wed, 08 May 2013 04:20:11 GMT

+1 Kelvin

Re: What have Austrians been wrong about?

Kelvin Silva — Wed, 08 May 2013 04:17:28 GMT

Blah blah blah history happened at some time in the past blah blah blah.

All the cool kids talk about the present.

I like you, gotlucky.

Re: What have Austrians been wrong about?

gotlucky — Wed, 08 May 2013 04:12:26 GMT

Krugman acknowledges Murphy's existence?