Keynesian Archive

  • The fact we can forecast any event to the day PROVES that markets are by no means RANDOM. Now, lets begin with that statement and follow it through. If markets are NOT random, then the implication for government, economics, fund management, and all social sciences are actually incorrect sciences

    The Real Implications of Forecasting – More Profound than you Think

    The fact we can forecast any event to the day PROVES that markets are by no means RANDOM. Now, lets begin with that statement and follow it through. If markets are NOT random, then the implication for government, economics, fund management, and all social sciences are actually incorrect sciences

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  • "Growth" meet "mal-investment boom-bust" In a perfect example of the smoke-and-mirror-ness of China's credit-fueled expansion, a 27-storey high-rise building which was completed on November 15th 2015 was just demolished, "having been left unused for too long."

    China Goes Full Keynesian-tard: Demolishes Never-Used Just-Built Skyscraper

    "Growth" meet "mal-investment boom-bust" In a perfect example of the smoke-and-mirror-ness of China's credit-fueled expansion, a 27-storey high-rise building which was completed on November 15th 2015 was just demolished, "having been left unused for too long."

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  • Interventions in markets by governments and central banks are routine and we take them for granted. No one questions them, but they can create dangerous distortions. Their reason for intervening is to take price determination away from markets and consumers.

    The purpose of market intervention

    Interventions in markets by governments and central banks are routine and we take them for granted. No one questions them, but they can create dangerous distortions. Their reason for intervening is to take price determination away from markets and consumers.

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  • One of the more popular variants of the broken window fallacy is that natural disasters result in economic growth. I remember when Katrina came around, there was no shortage of pundits (recent Nobel laureate Paul Krugman included) describing it as having created economic activity and growth, because, after all, rebuilding all the destruction will add to GDP! But was Katrina really beneficial? Imagine there is a city that is leveled by an earthquake. The residents then rebuild their city. This adds to GDP and is hailed as creating economic activity and growth. But is that an accurate assessment?

    Broken Window Fallacy

    One of the more popular variants of the broken window fallacy is that natural disasters result in economic growth. I remember when Katrina came around, there was no shortage of pundits (recent Nobel laureate Paul Krugman included) describing it as having created economic activity and growth, because, after all, rebuilding all the destruction will add to GDP! But was Katrina really beneficial? Imagine there is a city that is leveled by an earthquake. The residents then rebuild their city. This adds to GDP and is hailed as creating economic activity and growth. But is that an accurate assessment?

    Continue Reading...