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Old 10-13-2012, 08:55 PM   #35
KevinNYC
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Default Austrain economics

Quote:
Originally Posted by joe
The Austrian predictions aren't from 2009, they've been predicting this for 30-40 years.

Peter Schiff who claims to follow Austrian economics and was an adviser to Ron Paul made such claims in 2009 and did use Zimbabwe as an example.

If they have been predicting it for 30-40 years, that actually doesn't seem to have much predictive value.

If I say in the next 40 years, the Chicago Bears are going to win the Super Bowl, that just doesn't seem to be too useful.

The link above is from a Krugman blog post where he accuses the Austrian of not being empirical, not learning from the evidence.

Quote:
the Austrian/Ron Paul types made some very strong predictions about inflation ó and rightly, given their model of how the world works. In their version of reality, it really isnít possible to triple the monetary base without dire effects on the price level. In my version of reality, of course, thatís not only possible but what the model predicts in a liquidity trap.

So since we did indeed triple the monetary base with nothing much happening to inflation, the right lesson to draw is that their model is all wrong. Unfortunately, I see no hint that anyone in that camp is prepared to consider that possibility.

Quote:
Originally Posted by joe
Once you start down this road of paper money and central banking, economic failure stops being a matter of "if" and become a matter of "when."

You do know there were economic failures before the Fed existed?
http://en.wikipedia.org/wiki/Panic_of_1837
http://en.wikipedia.org/wiki/Panic_of_1857
http://en.wikipedia.org/wiki/Panic_of_1873
http://en.wikipedia.org/wiki/Panic_of_1884
http://en.wikipedia.org/wiki/Panic_of_1893

One feature of them is they tended to be long lasting.
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