Making sense of correlations in economics
byOften we observe that two pieces of data, which are not supposed to have any relationship, appear to have very high visual correlation….
Economics
Statistics and the facts of economic reality
byThe government’s releases of various economic indicators such as GDP, CPI and unemployment receive wide coverage in the media. In a measured and…
Forget velocity of money circulation
byIf there is one concept that illustrates the difference between a top-down macro-economic approach and the reality of everyday life it is the velocity…
Paul Krugman’s Predictions about “Austerity” Aren’t Aging Well
byPaul Krugman’s arguments do not fare well against evidence in a new book written by economists Alberto Alesina, Carlo Favero, and Francesco Giavazzi titled,…
Is deflation about general decline in prices?
byFor most experts deflation is bad news since it generates expectations for a decline in prices. Because of this it is held, consumers…
The balance of payments myth
byIn March, the US trade account balance stood at a deficit of $50 billion against a deficit of $49.28 billion in February and a…
Should the Fed tamper with the quantity of money?
byMost economists are of the view that a growing economy requires a growing money stock, because economic growth gives rise to a greater…
The essence of goods prices determination
byWhy do individuals pay much higher prices for some goods versus other goods? The common reply to this is the law of supply…
Economic stability and economic growth
byDuring the period 1920 to 1960, we can observe that the annual growth rate of production was more volatile than between the…
Debasing the Baseless – Modern Monetary Theory
byPopulist politicians are turning to Modern Monetary Theory Fiscal stimulus has not led to significant inflation during the last decade MMT is too…