Wednesday , June 26 2019
Home / Tag Archives: Economic History

Tag Archives: Economic History

Macro theory for all times and all places

In 1936, John Maynard Keynes came up with a macro model that was a product of its time. That’s the wrong way to do macro. Models should be based on the empirical facts of all countries and all time periods. If your macro model cannot explain why the US experienced a major deflation (with NGDP falling nearly 30%) from mid-1920 to mid-1921, the model is useless. If it cannot explain why industrial production suddenly fell by 30% after mid-1920, the model is useless. If...

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Murray on the Prevalence of “Poverty”

Charles Murray‘s Losing Ground contains a most surprising claim: [P]overty did not simply climb upward on our national list of problems; it abruptly reappeared from nowhere.  In the prologue to this book, 1950 was described as a year in which poverty was not part of the discourse about domestic policy – indeed, as a year in which the very word “poverty” was seldom used.  The silence was not peculiar to 1950.  From the outset of the Second World War until 1962, little...

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The Spectator and the Market Miracle

Long before Adam Smith wrote Theory of Moral Sentiments or Wealth of Nations, Joseph Addison and Richard Steele began their own project to portray and educate the rising merchant classes of 18th century London. Their project—a daily paper called The Spectator[1] that was issued from 1711-1712, is a treasure trove of humor, literary criticism, political and social gossip and advice for the early 18th century man or woman on the rise. For friends of this website, it is...

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An Alternative Perspective on Anglo-American Economic Liberties

As economic freedom gains traction in different spheres of the world, with marked successes most notable in Asia of late, understanding how markets come about within a state of economic freedom are tied closely to limitations on arbitrary executive powers. Michael Patrick Leahy’s Covenant of Liberty: The Ideological origins of the Tea Party movement assess the emergence of the Tea Party movement in the United States, which gained steam in 2008, arguing the US draws...

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Thatcherism at 40

On May 4th 1979, Margaret Thatcher took office as the prime minister of the United Kingdom. When I was younger and more libertarian than I am now, I used to think that Thatcher would be remembered one day as a moderate statist, because soon enough we would see far more sweeping reforms than hers, wider and wider privatisations, free-market liberalism if not an-cap eventually triumphing. Was I wrong! Love her or hate her, Thatcher is still now – and will be for a...

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A Question on Victims of Communism Day 2019

George Mason University law professor Ilya Somin, over at The Volokh Conspiracy, makes the point that May 1 should be a day to honor victims of Communism. I agree. So to honor that day, here are some questions. First, some background. I carry old Wall Street Journal puzzles with me when I travel and I was doing one on the way from LAX to Newark last Wednesday. Here’s the clue: “Pre-October Revolution rulers.” The answer is a word with 5 letters. The answer is...

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Is Liberal Civilization a ‘Somewhere’?

Dan Klein continues his gallant battle to recover the word “liberal” for classical liberals. His last effort is “10 Reasons Why You Shouldn’t Call Leftists ‘Liberal’.” I have to confess that I am ambivalent about some of the arguments Dan makes here. He concludes his piece by writing that: In The Lion King, the spirit of Mufasa tells Simba: Remember who you are. You are not an “anywhere,” but a “somewhere”: a son or daughter of liberal civilization. This is consistent...

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Francis Hutcheson Speaks to Veganism

“Never to be forgotten” is how Adam Smith described each of the two men who influenced him most, and only those two: his best friend David Hume and his Glasgow teacher and mentor Francis Hutcheson. Huge hearted, Hutcheson was larger than life, the warm soul of the Scottish Enlightenment in the decades preceding his death in 1746. In a reading group on his Short Introduction to Moral Philosophy (Latin 1742, revised 1745, and English 1747), we came upon a passage worth...

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Paasche Says Progress

When economists debate economic stagnation, I routinely recall my undergraduate macroeconomics textbook, Dornbusch and Fischer’s Macroeconomics (5th edition). In Appendix 2-1, these famed economists introduce readers to two main contrasting price indices: the Laspeyres, or base-weighted, and the Paasche, or current-weighted: While this may seem technical, much is at stake. Suppose a stagnationist belittles the economic importance of the internet. “So we get some...

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