Category Archives: Economic Theory

When I first encountered the Harrod-Domar growth model I never interpreted it as a long-period representation. It seemed to me such a strange characterisation and, I’ll admit, when I first approached the growth literature that arose out of it I … Continue reading →

On my post about Austrian and Marxian capital theory a commenter left a fairly predictable ‘Austrian comment’ which denied that they assume perfect foresight in their theory of interest rates and investment, gave a confused story about accounting identities (apparently … Continue reading →

One thing that I notice on the blogs is that I don’t think I have ever seen anyone give a clear description of the external trade account of a country. Nor have I seen anyone give a clear explanation of … Continue reading →

Readers of this blog will know that I am not generally very sympathetic to Austrian economics. There is one point on which the early Austrians did contribute an interesting idea to the world of economics: namely, their theory of capital. … Continue reading →

I recently came across a fascinating paper by Victoria Chick entitled ‘The Future is Open: On Open-System Theorising in Economics‘. I want to focus on a specific aspect of the paper; namely, Chick’s discussion on the psychological possibilities of actually … Continue reading →

I have long complained that the likes of Paul Krugman have grossly misinterpreted the meaning of the term ‘liquidity trap’. These economists seem to think that we are currently in a liquidity trap despite the fact that yields on bonds are … Continue reading →