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The author or concept searched is found in the following 6 entries.
| Disputed term/author/ism | Author |
Entry |
Reference |
|---|---|---|---|
| Assets | Neoclassical Economics | Mause I 225 Assets/Neoclassics/Monetarism: Assets are money, bonds, shares as well as existing and newly created real capital up to human assets. In terms of microeconomic theory, the portfolio is in equilibrium if the marginal return of each form of investment is identical. If this situation leads to an expansionary monetary policy, the rate of return on money decreases. Households will transfer their assets into other forms of assets. >Microeconomics, >Neoclassics, >Equilibrium, >Equilibirum theory, >Monetary policy, >Monetarism. The neoclassical and monetarist approaches assume a high interest rate reactivity of all forms of investment and thus also of investment demand. All economic policy interventions are therefore also assessed on the extent to which they influence the overall economic interest rate level. An expansive monetary policy initially causes interest rate cuts (liquidity effect) and thus considerable effects on the goods markets in the form of volume and price adjustments. >Interest rates. |
Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
| Demand | Marginalism | Kurz I 259 Demand/Supply/Neoclassical Economics/Marginalism/Kurz: The method which marginalist economists, (…) generally adopted up till the 1930s was the long-period method inherited from the classical authors. However, with their fundamentally different kind of analysis - demand and supply theory - they encountered formidable problems. These originated with their concept of capital. The sought determination of income distribution in terms of the demand for and the supply of the different factors of production - labour, land and capital - necessitated that they specify the capital endowment of the economy at a given point in time in terms of a 'quantity of capital' that could be ascertained independently of, and prior to, the determination of relative prices and the rate of profits. >Growth/Neoclassical Economics, >Exogenous Growth/Neoclassical Economics, cf. >Growth/Classical Economics. Yet, as Erik Lindahl and others understood very well, this was possible only in the exceptionally special case of a corn model in which there was but a single capital good. In order to apply the demand and supply approach to all economic phenomena, neoclassical authors were thus compelled to abandon Kurz I 260 long-period analysis and develop (…) intertemporal (and temporary) equilibrium analysis. >Equilibrium, >Equilibirum theory/Neoclassical Economics, >New growth theory. Kurz, Heinz D. and Salvadori, Neri. „Endogenous growth in a stylised 'classical' model“.In: Kurz, Heinz; Salvadori, Neri 2015. Revisiting Classical Economics: Studies in Long-Period Analysis (Routledge Studies in the History of Economics). London, UK: Routledge. |
Kurz I Heinz D. Kurz Neri Salvadori Revisiting Classical Economics: Studies in Long-Period Analysis (Routledge Studies in the History of Economics). Routledge. London 2015 |
| Demand | Neoclassical Economics | Kurz I 259 Demand/Supply/Neoclassical Economics/Marginalism/Kurz: The method which marginalist economists, (…) generally adopted up till the 1930s was the long-period method inherited from the classical authors. However, with their fundamentally different kind of analysis - demand and supply theory - they encountered formidable problems. These originated with their concept of capital. The sought determination of income distribution in terms of the demand for and the supply of the different factors of production - labour, land and capital - necessitated that they specify the capital endowment of the economy at a given point in time in terms of a 'quantity of capital' that could be ascertained independently of, and prior to, the determination of relative prices and the rate of profits. >Growth/Neoclassical Economics, >Exogenous Growth/Neoclassical Economics, cf. >Growth/Classical Economics. Yet, as Erik Lindahl and others understood very well, this was possible only in the exceptionally special case of a corn model in which there was but a single capital good. In order to apply the demand and supply approach to all economic phenomena, neoclassical authors were thus compelled to abandon Kurz I 260 long-period analysis and develop (…) intertemporal (and temporary) equilibrium analysis. >Equilibrium, >Equilibirum theory/Neoclassical Economics, >New growth theory. Kurz, Heinz D. and Salvadori, Neri. „Endogenous growth in a stylised 'classical' model“.In: Kurz, Heinz; Salvadori, Neri 2015. Revisiting Classical Economics: Studies in Long-Period Analysis (Routledge Studies in the History of Economics). London, UK: Routledge. |
Kurz I Heinz D. Kurz Neri Salvadori Revisiting Classical Economics: Studies in Long-Period Analysis (Routledge Studies in the History of Economics). Routledge. London 2015 |
| Demand for Money | Keynesianism | Rothbard III 789 Speculative demand/interest/Keynesianism/Rothbard: Admitting (…) that time preference determines the proportions of consumption and investment and that the demand for money determines the proportion of income hoarded, does the demand for money play a role in determining the interest rate? >Time preference/Rothbard, >Demand for money/Rothbard. The Keynesians assert that there is a relation between the rate of interest and a "speculative" demand for cash. Should the schedule of the latter rise, the former rises also. RothbardVsKeynesianism: But this is not necessarily true. A greater proportion of funds hoarded can be drawn from three alternative sources: (a) from funds that formerly went into consumption, (b) from funds that went into investment, and (c) from a mixture of both that leaves the old consumption-investment proportion unchanged. Condition (a) will bring about a fall in the rate of interest; condition (b) a rise in the rate of interest, and condition (c) will leave the rate of interest unchanged. Thus hoarding may reflect either a rise, a fall, or no change in the rate of interest, depending on whether time preferences have concomitantly risen, fallen, or remained the same. >Hoarding. Keynesianism: The Keynesians contend that the speculative demand for cash depends upon and determines the rate of interest in this way: if people expect that the rate of interest will rise in the near future, then their liquidity preference increases to await this rise. Equilibirum theory/Keynes/RothbardVsKeynes: This, however, can hardly be a part of a long-run equilibrium theory, such as Keynes is trying to establish. Speculation: Speculation, by its very nature, disappears in the ERE (Evenly Rotating Economy), and hence no fundamental causal theory can be based upon it. >Evenly Rotating Economy/Rothbard. Interest: Furthermore, what is an interest rate? One grave and fundamental Keynesian error is to persist in regarding the interest rate as a contract rate on Ioans, instead of the price spreads between stages of production. >Production structure/Rothbard. The former (…) is only the reflection of the latter. A strong expectation of a rapid rise in interest rate means a strong expectation of an increase in the price spreads, or rate of net return. Speculation: A fall in prices means that entrepreneurs generally expect that factor prices will fall further in the near future than their selling prices. >Factors of Production, >Factor market, >Structure of production/Rothbard. But it requires no Keynesian labyrinth to explain this phenomenon; all we are confronted with is a situation in which entrepreneurs, expecting that factor prices will soon fall, cease investing and wait for this happy event so that their return will be greater. This is not "liquidity preference," but speculation on price changes. >Liquidity preference/Keynesianism, >Speculation/Rothbard, >Investments/Rothbard, >Demand for money/Keynesianism. Rothbard III 790 Demand for money/Keynesianism/Rothbard: … The final Keynesian bogey is that people may acquire an unlimited demand for money, so that hoards will indefinitely increase. This is termed an "infinite" liquidity preference. >Liquidity preference/Keynesianism. Vs „Infinite“ money demand see >Demand for Money/Rothbard. And this is the only case in which neo-Keynesians such as Modigliani believe that involuntary unemployment can be compatible with price and wage freedom. >Modigliani. The Keynesian worry is that people will hoard instead of buying bonds for fear of a fall in the price of securities. >Hoarding/Rotbhard. RothbardVsKeynesianism: Translating this into more important "natural" terms, this would mean, (…) not investing because of expectation of imminent increases in the natural interest rate. Rather than act as a blockade, however, this expectation speeds the ensuing adjustment. Furthermore, the demand for money could not be infinite since people must always continue consuming, whatever their expectations. Of necessity, therefore, the demand for money could never be infinite. The existing level of consumption, in turn, will require a certain level of investment. As long as productive activities are continuing, there is no need or possibility of lasting unemployment, regardless of the degree of hoarding.(1) >Unemployment/Rothbard. Uncertainty: A demand for money to hold stems from the general uncertainty of the market. Keynesianism: Keynesians, however, attribute liquidity preference, not to general uncertainty, but to the specific uncertainty of future bond prices. RothbardVs: Surely this is a highly superficial and limiting view. In the first place, this cause of liquidity preference could occur only on a highly imperfect securities market. >Risks/Rothbard. LachmannVsKeynes: As Lachmann pointed out years ago in a neglected article, Keynes' causal pattern - "bearishness" causing "liquidity preference" (demand for cash) and high interest rates - could take place only in the absence of an organized forward orfutures market for securities. If such a market existed, both bears and bulls on the bond market „could express their expectations by forward transactions which do not require any cash. Where the market for securities is fully organized over time, the owner of 4% bonds who fears a rise in the rate of interest has no incentive to exchange them for cash, for he can always "hedge" by selling them forward.“(2) Rothbard III 792 Rothbard: Bearishness would cause a fall in forward bond prices, followed immediately by a fall in spot prices. Thus, speculative bearishness would, of course, cause at least a temporary rise in the rate of interest, but accompanied by no increase in the demand for cash. Hence, any attempted connection between liquidity preference, or demand for cash, and the rate of interest, falls to the ground. >Interest rates/Keynesianism, >Interest rates/Rothbard. 1. As Hutt points out, if we can conceive of a situation of infinitely elastic liquidity preference (and no such situation has ever existed), then "we can conceive of prices falling rapidly, keeping pace with expectations of price changes, but never reaching zero, with full utilization of resources persisting all the Way." Ibid., p. 398. 2. L.M. Lachmann, "Uncertainty and Liquidity Preference," Economica, August, 1937, p. 301. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
| Interest Rates | Keynesianism | Rothbard III 787 Interest rates/Keynesianism/Rothbard: A fall in the rate of interest, according to the Keynesians, means that less interest is being earned from bonds, and therefore there is a greater inducement to hold cash. This is correct (as long as we allow ourselves to think in terms of the interest rate as determining instead of being determined), but highly inadequate. Rothbard III 788 RothbardVsKeynes: For if a Iower interest rate "induces" greater cash holdings, it also induces greater consumption, since consumption also becomes more attractive. In fact, one of the grave defects of the liquidity-preference approach is that the Keynesians never think in terms of three "margins" being decided at once. They think only in terms of two at a time. >Liquidity preference/Keynes, >Liquidity preference/Modigliani. Interest/RothbardVsKeynesianism: The rate of interest (…) is determined by time preferences, which also determine the proportions of consumption and investment. To think of the rate of interest as "inducing" more or less saving or hoarding is to misunderstand the problem completely.(1) >Time preference/Rothbard. Time preference: Admitting, then, that time preference determines the proportions of consumption and investment and that the demand for money determines the proportion of income hoarded, does the demand for money play a role in determining the interest rate? Rothbard III 789 Keynesianism: The Keynesians assert that there is a relation between the rate of interest and a "speculative" demand for cash. Should the schedule of the latter rise, the former rises also. RothbardVsKeynesianism: But this is not necessarily true. A greater proportion of funds hoarded can be drawn from three alternative sources: (a) from funds that formerly went into consumption, (b) from funds that went into investment, and (c) from a mixture of both that leaves the old consumption-investment proportion unchanged. Condition (a) will bring about a fall in the rate of interest; condition (b) a rise in the rate of interest, and condition (c) will leave the rate of interest unchanged. Thus hoarding may reflect either a rise, a fall, or no change in the rate of interest, depending on whether time preferences have concomitantly risen, fallen, or remained the same. >Speculative demand/Keynesianism. Rothbard III 789 Speculative demand/interest/Keynesianism/Rothbard: Admitting (…) that time preference determines the proportions of consumption and investment and that the demand for money determines the proportion of income hoarded, does the demand for money play a role in determining the interest rate? >Time preference/Rothbard, >Demand for money/Rothbard. The Keynesians assert that there is a relation between the rate of interest and a "speculative" demand for cash. Should the schedule of the latter rise, the former rises also. RothbardVsKeynesianism: But this is not necessarily true. A greater proportion of funds hoarded can be drawn from three alternative sources: (a) from funds that formerly went into consumption, (b) from funds that went into investment, and (c) from a mixture of both that leaves the old consumption-investment proportion unchanged. Condition (a) will bring about a fall in the rate of interest; condition (b) a rise in the rate of interest, and condition (c) will leave the rate of interest unchanged. Thus hoarding may reflect either a rise, a fall, or no change in the rate of interest, depending on whether time preferences have concomitantly risen, fallen, or remained the same. >Hoarding/Keynesianism. Keynesianism: The Keynesians contend that the speculative demand for cash depends upon and determines the rate of interest in this way: if people expect that the rate of interest will rise in the near future, then their liquidity preference increases to await this rise. Equilibirum theory/Keynes/RothbardVsKeynes: This, however, can hardly be a part of a long-run equilibrium theory, such as Keynes is trying to establish. Speculation: Speculation, by its very nature, disappears in the ERE (Evenly Rotating Economy), and hence no fundamental causal theory can be based upon it. >Evenly Rotating Economy/Rothbard. Interest: Furthermore, what is an interest rate? One grave and fundamental Keynesian error is to persist in regarding the interest rate as a contract rate on Ioans, instead of the price spreads between stages of production. >Production structure/Rothbard. The former (…) is only the reflection of the latter. A strong expectation of a rapid rise in interest rate means a strong expectation of an increase in the price spreads, or rate of net return. Speculation: A fall in prices means that entrepreneurs generally expect that factor prices will fall further in the near future than their selling prices. >Factors of Production, >Factor market, >Structure of production/Rothbard. But it requires no Keynesian labyrinth to explain this phenomenon; all we are confronted with is a situation in which entrepreneurs, expecting that factor prices will soon fall, cease investing and wait for this happy event so that their return will be greater. This is not "liquidity preference," but speculation on price changes. >Liquidity preference/Keynesianism, >Speculation/Rothbard, >Investments/Rothbard, >Demand for money/Keynesianism. Rothbard III 997 Interest rate/money supply /Rothbard: Equilibrium: It should not be surprising that the market tends to revert to its preferred ratios. The same process (…) takes place in all prices after a change in the money stock. Increased money always begins in one area of the economy, raising prices there, and filters and diffuses eventually over the whole economy, which then roughly returns to an equilibrium pattern conforming to the value of the money. Rothbard III 998 The market therefore reacts to a distortion of the free-market interest rate by proceeding to revert to that very rate. The distortion caused by credit expansion deceives businessmen into believing that more savings are available and causes them to malinvest - to invest in projects that will turn out to be unprofitable when consumers have a chance to reassert their true preferences. This reassertion takes place fairly quickly – as soon as owners of factors receive their increased incomes and spend them. Market interest rate/money supply/Economic theories/Rothbard: This theory permits us to resolve an age-old controversy among economists: whether an increase in the money supply can Iower the market rate of interest. Rothbard III 998 Mercantilism/Keynesianism: To the mercantilists - and to the Keynesians - it was obvious that an increased money stock permanently Iowered the rate of interest (given the demand for money). Classical economics: To the classicists it was obvious that changes in the money stock could affect only the value of the monetary unit, and not the rate of interest. RothbardVsMercantilism/RothbardVsKeynesianism: The answer is that an increase in the supply of money does Iower the rate of interest when it enters the market as credit expansion, but only temporarily. In the long run (and this long run is not very "long"), the market re-establishes the free-market time-preference interest rate and eliminates the change. In the long run a change in the money stock affects only the value of the monetary unit. >Time preference/Rothbard, >Savings/Rothbard, >Inflation/Rothbard, >Credit expansion/Rothbard. 1. Mises, Human Action, New Haven, Conn.: Yale University Press, 1949. Reprinted by the Ludwig von Mises Institute, 1998. pp. 529-30. Mause I 225 Interest Rates/Keynesianism: In Post-Keynesian models in the tradition of Keynes (1) and Kalecki (2) it is often assumed that interest rates will have little influence on demand for goods in the real economy. In particular, there is skepticism about the interest rate response of investment demand. However, monetary policy is regarded as relevant to distribution policy because it is also assumed to have an influence on long-term interest rates and thus on the income generation of asset owners. >J. M. Keynes, >M. Kalecki, >Economic cycle, >Investment trap, >Monetary policy. 1. J. M. Keynes, The general theory of employment, interest and money. London 1936 2. Michal Kalecki, In Collected works of Michal Kalecki, Hrsg. Jerzy Osyatinski. Oxford 1973. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
| Supply | Neoclassical Economics | Kurz I 259 Demand/Supply/Neoclassical Economics/Marginalism/Kurz: The method which marginalist economists, (…) generally adopted up till the 1930s was the long-period method inherited from the classical authors. However, with their fundamentally different kind of analysis - demand and supply theory - they encountered formidable problems. These originated with their concept of capital. The sought determination of income distribution in terms of the demand for and the supply of the different factors of production - labour, land and capital - necessitated that they specify the capital endowment of the economy at a given point in time in terms of a 'quantity of capital' that could be ascertained independently of, and prior to, the determination of relative prices and the rate of profits. >Growth/Neoclassical Economics, >Exogenous Growth/Neoclassical Economics, cf. >Growth/Classical Economics. Yet, as Erik Lindahl and others understood very well, this was possible only in the exceptionally special case of a corn model in which there was but a single capital good. In order to apply the demand and supply approach to all economic phenomena, neoclassical authors were thus compelled to abandon Kurz I 260 long-period analysis and develop (…) intertemporal (and temporary) equilibrium analysis. >Equilibrium, >Equilibirum theory/Neoclassical Economics, >New growth theory. Kurz, Heinz D. and Salvadori, Neri. „Endogenous growth in a stylised 'classical' model“.In: Kurz, Heinz; Salvadori, Neri 2015. Revisiting Classical Economics: Studies in Long-Period Analysis (Routledge Studies in the History of Economics). London, UK: Routledge. Mause I 226 Supply/Neoclassical Theory: Economic fluctuations can (...) also occur on the supply side of the goods markets in the sense of the neo-classical theory or in the theory of real business cycles (Real Business Cycle or RBC-theory; Stadler 1994(1)) if it comes to fluctuations in the provision of production factors. Neoclassical theory: for them, what is happening on the labour markets ((s) for economic development) is important in the medium term. See Demand/Keynesianism, see Economic Cycle/Public Choice. 1. Stadler, George W., Real business cycles. Journal of Economic Literature 32, (4) 1994, S. 1750– 1783. |
Kurz I Heinz D. Kurz Neri Salvadori Revisiting Classical Economics: Studies in Long-Period Analysis (Routledge Studies in the History of Economics). Routledge. London 2015 Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
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