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Åke E. Andersson and David Emanuel Andersson

The games of markets including entrepreneur-driven economic development have always taken place on an arena of the combined material and non-material infrastructure. The infrastructure thus constitutes the arena; it is public capital that facilitates and constrains the rapid “games” of buying and selling that economic agents play. Agents perceive the arena as stable because its evolution is so much slower than that of markets for goods and services. Synergetic theory is well equipped to handle such multiple timescales. Its application to economic phenomena enables us to show that competitive equilibrium theory requires prior specification of the infrastructural arena, which consists of public knowledge, space-bridging networks and institutions. Synergetic theory can also help us avoid the pitfalls of conventional macroeconomic theory. In this chapter, we demonstrate how macroeconomic equilibrium depends on the infrastructure. We claim that all goods are durable and are thus instances of capital. This means that historical trajectories, current outcomes, uncertain expectations and changes in spatial accessibility all influence the growth and fluctuations in the value of capital goods. Dynamic non-linear interactions between scientists, inventors and entrepreneurs affect investments. New technological or design ideas spread most easily among spatially proximate firms within communication and transport networks. Such network effects shape processes of spatial clustering, agglomeration and urbanization. Based on causal and various econometric considerations, it has been common for economists to resort to difference equation in their modeling strategies. But if we include dynamic interactions within a system of difference equations—so as to accommodate realistic causal assumptions—it will often result in complex models with chaotic outcomes. However, there are ways out of chaos in economic modeling. The first is to focus on continuous dynamic synergetic models, which implies a careful separation of variables and dynamic processes according to their relevant timescales as well as the collectiveness of their impacts.

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Giuseppe Eusepi and Richard E. Wagner

The book’s theme is an elaboration and refinement of the early-twentieth century orientation toward public debt that Antonio de Viti de Marco set forth. As the book’s title asserts, public debt is a misnomer for a democratic scheme of political economy. To declare a democratic polity to be indebted is akin to observing a grin without a cat, to recall Dennis Robertson’s view of Keynes’s liquidity preference theory. While the entire book develops this claim, this chapter explains how standard macro theories of various types are more myth than reality, and with the mythology obscuring the realities of the domination-subordination relationships that suffuse democratic regimes.

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Edited by Gregory M. Randolph, Michael T. Tasto and Robert F. Salvino Jr.

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Gregory M. Randolph

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Edited by Gregory M. Randolph, Michael T. Tasto and Robert F. Salvino Jr.

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Richard M. Salsman

Not until the Enlightenment and the financial revolution in the eighteenth century did sovereigns borrow publicly, regularly, and responsibly. Constitutionalism, the rule of law, ethical acceptance of lending, and more respect for sanctity of contract increased creditors’ willingness to lend. Three centuries of data show that public leverage – the ratio of public debt to GDP – was highest at the end of the Napoleonic Wars and World War II. Public leverage since 1980 has increased steadily for many sovereigns, but for most of them leverage is still far below prior peaks. The multi-decade rise in public leverage reflects burgeoning welfare states but also coincides with an anomalous decline in public borrowing costs, due mainly to repressive central bank policies.

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Edited by Gregory M. Randolph, Michael T. Tasto and Robert F. Salvino Jr.

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Henrique Schneider

The chapter provides the background on the economics of this book, on the ‘sharing economy’ and how Uber can be assessed as an economic agent. This book understands markets as open-ended undetermined series of exchanges between a potentially unlimited number of agents. These agents engage voluntarily in the different market processes without knowing more than the other agents but judging their own beliefs, preferences and costs subjectively. Agents use the market processes in order to learn about other agents’ beliefs, preferences and costs. Market processes are cooperative actions. Whatever might be labelled the sharing economy relies on these market processes and does not in any way fundamentally change them. The sharing economy is not different from the traditional economy; to the contrary, it applies and broadens the application of market processes and individual actions. However, the role that technology plays is important. With the development of online networking, e- and online payment methods as well as individual online mobility, many business models gain scale and scope. Technology often makes it possible to diminish costs of participating in a market process, to learn quickly or gather information in a timely manner as well as to scale up some market processes. Uber, in due entrepreneurial spirit, seized this opportunity and turned it into a successful business model.
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Mårten Blix

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Pascal Salin

Studying an international system implies having a definition of a nation, in order to assess to what extent the analysis of an international phenomenon can be different from an analysis which does not take into consideration the existence of nations. This chapter stresses that several definitions of a nation can be given, but what is important is defining a nation from the point of view of monetary problems. By comparison with the traditional definition of a nation in trade theory, a monetary area – or a monetary nation – can be defined as an area of circulation of a currency. The chapter also discusses whether or not a monetary area should coincide, for instance, with a political area.