Free Capitalist Network - Community Archive
Mises Community Archive
An online community for fans of Austrian economics and libertarianism, featuring forums, user blogs, and more.

Spending Money "Locally"

rated by 0 users
Answered (Verified) This post has 1 verified answer | 16 Replies | 4 Followers

Not Ranked
15 Posts
Points 225
pjose posted on Wed, May 19 2010 10:09 AM

Recently I've heard many people touting the "absolute truth" that spending and keeping money locally will some how stimulate ones local economy by changing hands "x" amount of times.

My first response is, that if it seems logical to the masses then there is probably no validity to it.

Can someone validate or refute this concept with any sound Austrian economic theory?

 

  • | Post Points: 65

Answered (Verified) Verified Answer

Top 50 Contributor
Male
2,687 Posts
Points 48,995

Recently I've heard many people touting the "absolute truth" that spending and keeping money locally will some how stimulate ones local economy by changing hands "x" amount of times.

This is referring to the velocity of money.  Frank Shostak discusses the concept of the velocity of money on Mises Daily.

  • | Post Points: 35

All Replies

Top 500 Contributor
165 Posts
Points 1,730
cret replied on Thu, May 20 2010 12:57 AM

Comparative advantage was first described by Robert Torrens in 1815 in an essay on the Corn Laws. He concluded it was to England's advantage to trade with Portugal in return for grain, even though it might be possible to produce that grain more cheaply in England than Portugal.

http://en.wikipedia.org/wiki/Comparative_advantage#Origins_of_the_theory

 

is the above austrian or some other school??

  • | Post Points: 20
Top 50 Contributor
Male
2,687 Posts
Points 48,995

is the above austrian or some other school??

There was no Austrian school in 1815. 

  • | Post Points: 5
Page 2 of 2 (17 items) < Previous 1 2 | RSS