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« A Credit Theory of the Great Recession and The Long Slow Recovery (or Absence of One) | Main | Steve Davies on the Decline of Classical Liberalism »


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Mr. Horwitz,

Do you think that the short-term interest rates will/can remain low?

Well, then, where is the graph of "demand for loanable funds"? Where is the graph for "uncertainty"? Where is Northern Trust's graph of lending institution's "concern for capital adequacy"? And where are those three curves on the same graph of historical GDP, times of fiscal demand-side stimulus and fiscal supply-side stimulus, and times of monetary easing or contraction before, during, and after economic recessions?

With such a complete graph then maybe, just maybe, we laymen can get a picture of the 'science' of economics instead of being spoon-fed ideological pap from both the Left and Right. If Austrians cannot do any better than Keynesians in their 'science' in the indisputable prediction and universal duplication of any economy's performance, then no wonder we layman grow an anger, if not a contempt for the self-delusion that economics is a 'science.'

Don, By your definition, biology is not a science, let alone neurology, or any of the social sciences. Demanding the rules of physics is the problem, not the solution. The economy is a complex science, and pointless, simplistic graphs won't get anyone anywhere.

pointless, simplistic graphs won't get anyone anywhere

Really. Is that because the Austrian scientists don't know how to read data and make graphs?

Why are they sitting on so much [cash] if it's not about some form of uncertainty?

What's too much corporate cash? Oh, right, all the unrepatriated corporate cash stashed in Double Irish offshore accounts. Anyways, you need to compare corporate liquid assets to some intertemporal metric to ascertain whether there is too much or too little on the balance sheet relative to trend.

after being so low for a couple of years, it's no surprise that in a rapidly changing area like technology that investment expenditures there are picking up

Is it too much to request that ideologues examine BEA Table 5.5.6 before they pontificate?

There was no statistical decline in real investment in software during the Great Recession.

Do you know what component of equipment was hammered? Autos and light trucks. Just like households.

Austrians can do all the simplistic nonsense the economic pseudoscientists engage in. But, more importantly, they can engage in the real science necessary to understand complex processes. Can you? I doubt it.

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