Check out Prof. Cowen’s popular econ blog, Marginal Revolution. Moving to the world of Monetarism, Tyler Cowen introduces Milton Friedman and evaluates the case for creating monetary stability. Monetarism claims that money supply fluctuations drive the rate of inflation and deflation. Notable monetarist Milton Friedman proposed that stabilizing monetary supply would prevent excessive highs and […]
Check out Prof. Cowen’s popular econ blog, Marginal Revolution. What is the central claim of Austrian Business Cycle Theory? Cowen boils down the Austrians’ boom-bust explanation: when the government manipulates the money supply, entrepreneurs get false ideas about the economy and make unsustainable decisions. When the central bank inflates the supply of money, the real […]
Check out Prof. Cowen’s popular econ blog, Marginal Revolution. Does the ‘Real Business Cycle Theory’ have a corner on reality? Cowen gives us a crash course. Real Business Cycle Theory holds shocks to technology are the real causes economic downturns. According to these “realists,” technology shocks emanate from events that prevent an economy from producing […]
Check out Prof. Cowen’s popular econ blog, Marginal Revolution. In the Keynesian corner, Tyler Cowen examines the Keynesian theory of the business cycle. According to the Keynesian model, substantial economic slumps come from falling aggregate demand—the sum of overall consumption, investment, and government spending within the economy. When Aggregate Demand falls, producers of goods and […]
Check out Prof. Cowen’s popular econ blog, Marginal Revolution. Big crises raise big questions. In the wake of the recent financial crisis, economists are asking million-dollar macro-economic questions: What causes market fluctuation? What causes business cycles? In this series of videos, Professor Tyler Cowen vets the contenders for the “top macroeconomic theory” title. Tune in […]
The cost of borrowing money is at a record low. Low interest rates and cheap credit encourage people to spend more, and to save less. Is this good or bad? Many argue that we need low interest rates to encourage spending. But low interest rates don’t actually encourage people to spend more money. Low interest […]
If the government can print money, why doesn’t it just print some and hand it out? Economics professor Antony Davies explains that we can understand why printing money doesn’t work by looking at why money was invented in the first place. Prior to the invention of money, people relied on bartering to exchange goods and […]
When an economy falls into a recession, we typically observe a cluster of people making similar investment mistakes. According to historian Stephen Davies, these investment errors occur because governments or central banks manipulate the supply of money. These manipulations place artificial downward pressure on interest rates, creating false signals that entice individuals to invest in […]
Have we fixed the problems that created the most recent boom and bust? How have government interventions in the economy altered the expectations of individuals moving forward? How does government debt affect the economy as a whole? These questions, along with many others, are answered by historian Stephen Davies.