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I Spend 2 Hours Talking About the Austrian School
On the basics of Austrian economics. The concern with the fed and artificially lowering interest rates is at ~1 hour 15 mark.
austrian  Murphy  podcasts  macro 
yesterday by HispanicPundit
Getting Started
Staggeringly powerful OS X desktop automation with Lua. Making the runtime, funtime.
macro  osx  software  mechanical  keyboard 
18 days ago by nharbour
The onset of a downturn is as much a matter of mood as of money - Free exchange
Higher interest rates hurt some people but leave others better off or unaffected. The failure of a large manufacturer creates pain for workers and shareholders but opportunities for rivals, who can hoover up displaced labour and capital. Not all shocks lead to recessions. When they do, it is often because something goes wrong with an economy’s ability to roll with the punches: spending falls somewhere but is not offset by increases elsewhere. Perhaps the creditors who benefit from higher interest rates park their windfalls in the safe haven of government bonds, rather than recycling them into job-creating expenditure. Housing investment in America began to subtract from GDP growth in the fourth quarter of 2005. But the economy did not fall into recession for two more years, when other sources of spending ceased to outweigh the housing drag.

Recessions, then, are not just the after-effects of shocks, but periods when people and firms fail to use valuable resources as they become available. As demand slackens, bargains bloom in the form of cut-rate goods, willing and available workers, and appealingly priced assets. In the depths of a catastrophic financial crisis no one but Warren Buffett may have the guts and the means to spend more as others cut back. But most recessions are not associated with such calamities. The downturn of the early 1990s was an example of what Paul Krugman, a Nobel economics laureate, has called a “smorgasbord recession”, the product of a mix of troubles in modest portions. In these garden-variety slumps, people and firms with the capacity to spend more, who might normally leap at the chance to buy discounted goods or hire overqualified workers, instead allow their cash to pile up.

At its heart this behaviour is a matter of mass psychology, or “animal spirits”, as John Maynard Keynes put it. Economies are great chains of earning and spending, held together by shared expectations that all will continue as normal. People spend their incomes freely, on everything from homes to haircuts, in the belief that their jobs will not disappear and their incomes wither. Consequently, builders and stylists have jobs and incomes from which they too can spend. Faith in economic expansion is self-fulfilling. But it is not invulnerable. Contagious pessimism can flip an economy from one equilibrium to another, in which cautious consumers spend less and hiring and investment fall accordingly, validating the initial outbreak of pessimism. Shocks can precipitate a switch in sentiment by weakening links in the great chain. But if the public is confident enough of the durability of an expansion then even a big shock may not halt it. Conversely, if the mood in markets and on Main Street is sour enough, even a modest nudge may push an economy into a slump.
economics  macro  confidence  multipleequilibria  recessions 
21 days ago by gimber

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