Englund

Argentine President Javier Milei admires Mises, and he has adopted some Misesian ideas, such as the notion that “the middle of the road leads to socialism.” That is an impressive comeback for Mises, who died in 1973 without ever receiving mainstream acceptance in academia. After emigrating to the US in 1940, he retired as a visiting professor in 1969.  Yet as of this writing he has three titles on Amazon’s list of the 10 best-selling economics books. Meanwhile, among free-market types, the vibes have shifted in a way that has boosted the influence of Mises.   Hayek’s writing style was also more gentle, while Mises was uncompromising. As Hayek said about Mises’s book on socialism, published in 1922: “At first we all felt he was frightfully exaggerating and even offensive in tone.” Opinions will differ on whether the resurgence of Mises is a good thing. All I can say is that I think about Mises more than I did 10 years ago. His early books Socialism and Liberalism are 20th-...

Fifty years ago, banks and their loan officers still did most of the work. They’d use quantitative yardsticks, but the terms would come down to a banker’s discretion and a negotiation with the borrower. Now banks have largely been disintermediated in favor of credit markets.  Markets have clear advantages over banks. In the long run, the wisdom of crowds ensures they incorporate more points of view and arrive at a better price. And trading credit in securities markets avoids the inherent weakness of all fractional reserve banking: that a loss of confidence can render the institution insolvent. In a market, if confidence is lost in a credit, then buyers have an opportunity to snap up bargains. The risk of a systemic crisis is much reduced.  But even strong believers in free markets are worried that the new system is distorting judgments and misdirecting credit. Amar Bhide, an economist at Tufts University near Boston, argues that Friedrich Hayek, the great libertarian philosoph...

There are two ways to tell the story of neoliberalism after its triumph. The first is a familiar narrative of hubris and excess. Neoliberals were zealots who carried their ideas too far.  The second way of telling the story begins by paying more attention to how economic ideas are generated, and how their progenitors reckon with messy realities.  Both Burns’s book and economists Bruce Caldwell and Hansjoerg Klausinger’s Hayek: A Life, 1899-1950 – the first volume of what will surely be the definitive biography of Friedrich von Hayek – are masterpieces in this respect, offering a pathway to reconstruct neoliberalism’s intellectual history. In 1931, an invitation to lecture at the London School of Economics pulled Hayek out of the Austrian vortex and brought him into the center of a debate over how the state might compensate for the marketplace’s failures.  Jennifer Burns, Milton Friedman: The Last Conservative, Farrar, Straus and Giroux, 2023. Bruce Caldwell and Hansjoerg ...

Cantillon, en irländsk ekonom, bankir och börsspekulant på 1700-talet, var först med att poängtera att effekten av penningpolitiken beror på de kanaler genom vilka nya pengar pumpas in i samhällsekonomin, på vem som får pengarna och vad de används till. Lars Jonung Kolumn DN 2009-12-17 https://www.internetional.se/stabiliseringspolitik.htm#somhayek Kommentar av Rolf Englund: Det är detta, tror jag, som är en av grundbultarna i tänkandet hos  Hayek  och de andra  österrikarna . Om man stimulerar ekonomin med sänkta räntor och borttagen fastighesskatt, då ökar efterfrågan på bankaktier, fastigheter, filipinska hembiträden, krogar och Porsche-bilar. Om man stimulerar efterfrågan med högre barnbidrag, då ökar efterfrågan på helt andra saker. Ganska självklart, egentligen. ----- - Människors uppoffringar har givit resultat sade Göran Persson   i regeringsförklaringen i Riksdagen,  den 14 september 1999. Denna politik som förlängde lågkonjukturen fördes med stöd av LO...

Robert skidelsky’s three-volume biography of John Maynard Keynes achieved something few histories of economic thought can do: it was well written, packed with interesting detail and offered enough—but not too much—theory.  Now Keynes’s great rival, Friedrich Hayek, is the subject of a biography comparable to Lord Skidelsky’s. It is certainly on a similar scale. The first volume is more than 800 pages, and a second is on the way. Bruce Caldwell’s and Hansjoerg Klausinger’s work also has the makings of something just as good. Both were born into respectable families. Both were too clever for school and so got bored. Both liked holidaying in Cornwall. Both, in their economic theorising, used little mathematics. And, in their personal interactions, there was tremendous mutual respect, even if not always warmth. Keynes arranged for Hayek to spend time with him at King’s College, Cambridge, during the second world war. The Economist 17 November 2022 https://www.economist.com/culture/2022...

LONDON, Dec 1 (Reuters Breakingviews) - “Our earth is degenerate in these latter days: bribery and corruption are common; children no longer obey their parents; every man wants to write a book, and the end of the world is evidently approaching.” These words were inscribed on an Assyrian tablet nearly 5,000 years ago.  Doom-mongering is once again back in fashion.  There’s even a vogueish new term, “polycrisis”, to describe the multiple threats confronting economic prosperity and modern civilisation. My own contribution to the burgeoning crisis literature, “The Price of Time”, argues that ultralow interest rates in the years after the 2008 global financial crisis inflated a number of asset price bubbles and contributed to the buildup of leverage, widespread misallocation of capital and undue risk-taking.  The ensuing systemic fragility makes it extraordinarily difficult for central bankers to return interest rates to historically normal levels without crashing the economic...

PODD | 27 juli. Vad är spontan ordning, och vad spelar den för roll i ett fritt samhälle? https://www.svd.se/a/z7vybr/fa-hayek-visar-vagen-till-spontan-ordning Bernanke insists, the Fed has been successful in preventing another Great Depression and returning the US economy to growth. I agree with him. Chancellor emphatically does not. His guru is Friedrich Hayek Chancellor condemns the low interest rates adopted by central banks as the root of almost all economic evils. Does this charge sheet make sense? Not much. Martin Wolf 27 July 2022 https://englundmacro.blogspot.com/2022/07/bernanke-and-edward-chancellor-offer.html

 Two new books set out sharply conflicting perspectives on underlying issues. Arguably, Bernanke is the most influential thinker and practitioner on central banking of our era. His book, 21st Century Monetary Policy Edward Chancellor, historian, asset manager, journalist and author. The Price of Time offers a history of interest back to the Babylonians Behind each of them stands a different guru. For Bernanke, it is John Maynard Keynes Bernanke insists, the Fed has been successful in preventing another Great Depression and returning the US economy to growth. I agree with him. Chancellor emphatically does not. His guru is Friedrich Hayek Chancellor condemns the low interest rates adopted by central banks as the root of almost all economic evils. Does this charge sheet make sense? Not much.  Chancellor also has many complaints about the effect of low interest rates on financial instability and fragility. Yet it is unlikely that the modestly higher interest rates he recommends wo...

 Yes — It poses no inherent danger to states that issue their own currency, writes Stephanie Kelton.  No — This dangerous monetary practice ensures inflation is around the corner, writes Edward Chancellor. FT 3 May 2020 https://www.ft.com/content/53cb3f6a-895d-11ea-a109-483c62d17528 An enlarged money supply has different effects depending on who gets the money.  If the middle class and the poor receive enough money to buy goods in excess of the economy’s productive capacity, then the consumer price index will rise. This is what we typically mean by inflation.  Quantitative easing has placed enormous sums of money in the hands of the rich, driving up the prices for assets such as stocks and houses, and motivating the wizards of finance to invent new products.  This too is “inflation”, although we do not normally call it that. The result is not a rise in the CPI but increasing financial instability, as investors searching for yield plunge into ever riskier product...

Janek Wasserman’s The Marginal Revolutionaries A general history of the Austrian School from its beginnings to the present day. The title refers both to the later marginalization of the Austrian economists and to the original insight of its founding father, Carl Menger. New York Review of Books 14 May 2020 Den österrikiska skolan

Frances Coppola - April 22, 2018

År 2005 tog jag mig före att genomföra detta storhetsvansinniga projekt. Det har inte varit särskilt framgångsrikt och det har inte mötts med hejarop utan med förmodligen välgrundade tvivel av den enda person som kommenterat mitt inlägg. http://englundmacro.blogspot.se/2005_02_01_archive.html Sedan kom finanskrisen och eurokrisen och det hela föll i glömska. Men häromdagen fick jag ny inspiration när jag läste en artikel i Financial Times av Noah Smith, Bloomberg 5 August 2015. http://www.internetional.se/ostskol.htm#noa Han skrev att den österrikiska skolan inser att "productive capital come in multiple forms, while mainstream macro usually assumes that all forms of capital are interchangeable". Aha, tänkte jag, penningmängden är inte som vatten i en pool, utan i hinkar eller vattenkannor, som flödar över olika ställen av ekonomin. Jag har länge varit inne på tankegångar av detta slag. - Bättre då att Fed köper statspapper i stället för bostadsobligationer....

 - Man återkommer ständigt till Keynes och Hayek. Har den ekonomiska "vetenskapen" inte kommit längre?  - Är det så hemskt att vi faktiskt inte vet hur vi skall undvika att den nuvarande ekonomin byggd på en allt högre belåning av stigande huspriser skall kunna brytas och ersättas med något annat, vad det nu kan vara,   frågade jag på denna blog för några dagar sedan . Vi är i ett läge där räntorna är, och har varit, extremt låga, återhämtningen dröjer trots att villapriserna har lyckats återvända till nivåerna de hade innan de föll och utlöste finanskrisen. Några enarmade ekonomer är inte inom synhåll. Tvärtom är debatten hårdare och bittrare än någon gång sedan Keynes och Hayek drabbade samman på 1930-talet. Krugman vs. Tea Party. Det är inte bara jag som tycker så. I dag läste jag följande. "Battle raging between the world’s leading macroeconomists"  The European Central Bank has found itself caught in the crossfire  The Bank for International ...

Häromdagen läste jag en artikel där författaren hade kommit på att Baslel-banken nog hade rätt i att den låga räntan medför en växande skuldbörda som har ett slut eftersom den är  unsustainable  - inte uthållig. T here is a deeper issue to be tackled: why does the economy have to be stimulated in artificial ways through the boosting of lending  ? Han hade också kommit på att om det blir recession, för att använda ett milt ord, om konsumenterna slutar med att konsumera för lånta pengar, allt annat lika. Han hade en elegant lösning på detta. Man bör ersätta den bortfallande konsumtionen med företagsinvesteringar.  Javisst, men varför skulle företagen öka sina investeringar om de vet att konsumenterna skall dra ner på sina inköp? Hans artikel kan läsas här Jag erinrade mig Keynes   /The Treatise on Money's/ message was that   savings and investment, being different activities carried on by different people, could not simply be presum...

I have a dream. It is to create an, or rather, the, Hayek-Friedman-Keynes Synthesis, skrev jag, med en ödmjukhet väl i klass med Klas Eklund, på denna blog den 7 februari 2005 . Föga överraskande kanske har mina framsteg med detta varit i det närmaste obefintliga.Men nu kommer eldunderstöd från ingen mindre än Krugman. -The truth, although nobody on the right will ever admit it, is that Friedman was basically a Keynesian — or, if you like, a Hicksian.   His framework was just IS-LM coupled with an assertion that the LM curve was close enough to vertical — and money demand sufficiently stable — that steady growth in the money supply would do the job of economic stabilization.   These were empirical propositions, not basic differences in analysis; and if they turn out to be wrong (as they have), monetarism dissolves back into Keynesianism.   Paul Krugman, NYT blog 14 March 2012 Friedman - Hayek - Keynes

BBC News - Keynes v Hayek: Two economic giants go head to head Together we will create The Hayek-Friedman-Keynes Synthesis. I have a dream. It is to create an, or rather, the Hayek-Friedman-Keynes Synthesis. Is it re-inventing the wheel or an attempt to square the triangle? http://englundmacro.blogspot.com/2005_02_01_archive.html

Den 2/6 2009 skrev Carl-Johan Westholm under rubriken "Politiskt inkorrekt av Reinfeldt och Borg" ett hyllningsinlägg på sin blog Stateblind. "Om orsaken till krisen var att människor och företag lånade mer än de hade täckning för kan aldrig lösningen vara att stater gör likadant". Det skrev statsministern och finansministern på DN Debatt denna dag . - Så är det naturligtvis, kommenterade Westholm, som inte är vem som helt. Till exempel är han sekreterare i Mont Pelerin Society, grundad av Hayek . - Men så oerhört inkorrekt att påstå något sådant i t ex USA, Storbritannien eller Tyskland, tillade han, utan att konstatera den stora skillnaden mellan Tyskland och de andra båda länderna. - Den finansiella krisen håller på att övervinnas innan de s k fiskala stimulanserna gjort verkan, hävdade Westholm, och när de har gjort verkan, kommer statskulderna att vara högre, räntorna skjuta i höjden och/eller inflationen. - Det är roligt att läsa en artikel från högsta politi...

Welcome! Here is my plan: Together we will create The Hayek-Friedman-Keynes Synthesis. I have a dream. It is to create an, or rather, the Hayek-Friedman-Keynes Synthesis. Is it re-inventing the wheel or an attempt to square the triangle? Well, it is an attempt to use The Open Source Method for that purpose as I guess that I will fail if I try to do it myself. Let us start with reading Roger Garrison's Hayek-L Seminar introduction at http://www.hayekcenter.org/