The Economic Way of Thinking

EWOT Question Of The Day

Who predicted the Great Depression?

Here's the answer.

New Research Finds That The Great Depression Improved Health Among Its Sufferers

According to a new study in the Proceedings of the National Academy of Arts and Sciences.  I posted this over at The Austrian Economists blog.

Fellow Austrians, Please Read this Book

I think we shouldn't short-change this argument.  So many are calling the crisis "The Minsky Moment."  We need to have a critical read and a response to his argument.  You will notice his discussion combines theory and history throughout the book.  We need to do the same. 

I received mine in last Wednesday's mail and I can't put it down.

By the way, I think we also must come to terms with Tyler Cowen's Oct 21, 2008 post on money's impact on short-term as opposed to long-term interest rates.  I've long been concerned that our business cycle theory doesn't clearly address the term structure of interest rates, or do you think it does?

Overstated Perhaps, but Still Prescient

A quote from Rothbard's book, America's Great Depression:

What was the trouble?  Economic theory demonstrates that only governmental inflation can generate a boom-and-bust cycle, and that the depression will be prolonged and aggravated by inflation and other interventionary measures.  In contrast to the myth of laissez-faire, we have shown in this book how government intervention generated the unsound boom of the 1920's, and how Hoover's new departure aggravated the Great Depression by massive measures of interference.  The guilt for the Great Depression must, at long last, be lifted from the shoulders of the free market economy, and placed where it properly belongs: at the doors of politicians, bureaucrats, and the mass of "enlightened economists.  And in any other depression, past or future, the story will be the same

This -- including that final sentence -- was last published back in 1972.