When over the weekend the media began breathlessly repeating claims from unnamed intelligence officials that the CIA had foiled a deadly terrorist plot, I immediately suspected this would turn out like all the other cases, in which the episode is at least partly manufactured by some intelligence agency then used to demonstrate the need...
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Here is another of those head-scratchers, this one from Amartya Sen, about how neoclassical economics is partly responsible for the financial crisis because neoclassical economists hold that markets work “perfectly”: Since the crisis broke out the economics profession in general and mainstream economics in particular have been severely criticised. Do you think this is justified? The...
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Beacon readers will not be surprised by Wharton Professor Howard Pack’s verdict on of industrial policy: it doesn’t work. (Perhaps surprised only that a Wharton Professor holds this view.) Pack provides a concise summary of the academic literature on Japanese industrial policy: Knowledge@Wharton: What does the empirical evidence show? Does it show that interventionist...
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I don’t think of Ben Bernanke’s approach to monetary policy as soft, passive, or restrained, but of course my optimal monetary policy is no monetary policy. Laurence Ball thinks that Bernanke’s actions after 2008 were surprisingly cautious, compared to what Bernanke advocated as an academic and Fed Governor in the early 2000s. From 2000...
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Following up Bob’s excellent post: The Fed’s below-market interest-rate policy is also non-neutral in another important way, namely distorting people’s housing choices toward ownership (typically, a 30-year debt obligation) over renting. Aside from its efficiency effects, this of course has huge distributional consequences. I wrote about this in 2009 in the context of the...
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Did you know 2012 is the centenary of Charles Dickens’s birth? Dickens is often lumped with Carlyle, Shaw, Ruskin, etc. as a Romantic, Victorian, literary anti-capitalist. (Carlyle indeed disliked capitalism, but not for the usual reasons.) But Dickens, as I originally learned from Paul Cantor, was a wildly successful capitalist and entrepreneur, a driving force behind the...
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Paul Krugman tells us that “Friedrich Hayek is not an important figure in the history of macroeconomics.” He insists that there were no Keynes-Hayek debates in the 1930s, that “Hayek essentially made a fool of himself early in the Great Depression, and that therefore “his ideas vanished from the professional discussion.” Krugman is not...
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According to the latest Kauffman Foundation survey of “top” economics bloggers. (I participate, so it’s not that exclusive a club.) Regular Beacon readers will not be surprised by the biggest word in the cloud. The full report is available here. As Kauffman’s Tim Kane notes, “The economics blogging community has proven to be very...
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From Guido Hülsmann’s masterful biography of Ludwig von Mises: [Mises's] impact in [the early 1920s] was limited primarily by his deficiencies as a communicator. He was not an orator and lacked the charismatic personality to win over an audience. He had a fine and dry wit, but was often too subtle for those outside...
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Yale economist William Nordhaus, with the typically enlightened attitude of a Yale professor, offers his thoughts on monetary reform: Mr. Nordhaus dismissed notions of scrapping the central bank, as well as criticism of its chairman, Ben Bernanke, as “partisan” and “ignorant.” “Return to the gold standard? Give me a break. We’re not in Kansas....
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