November 29

Taking von Mises to pieces. Buttonwood, The Economist.

policymakers seem to show a lot less interest in the economic ideas of the "Austrian school” led by Ludwig von Mises and Friedrich Hayek, who once battled Keynes for intellectual supremacy. Yet the more you think about recent events, the odder that neglect seems. A one-paragraph explanation of the Austrian theory of business cycles would run as follows. Interest rates are held at too low a level, creating a credit boom. Low financing costs persuade entrepreneurs to fund too many projects. Capital is misallocated into wasteful areas. When the bust comes the economy is stuck with the burden of excess capacity, which then takes years to clear up.

other fare:
The next great crash will be ecological - and nature doesn't do bailouts. Johann Hari.

Margaret Atwood interview. Guardian.