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The missing link in the professional debate about the economic crisis: production time

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Roger W Garrison’s Time and Money: The Macroeconomics of Capital Structure bursts with insight but this from the final chapter could be the missing link in the debate about the economic crisis: [D]oes the existence and variability of production time have a first-order claim on our attention? This is the question which divides the schools of economic thought. If the answer is ‘no’, then conventional macroeconomics is right to ignore production time when dealing with questions of short-run variations in output […]

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Criticising HS2 via the FT

Via High-speed rail link must be built, economists insist – FT.com: Steve Baker, MP for Wycombe, said he was unconvinced that the huge cost of the scheme was justified. “The maths doesn’t add up; this is just sinking capital into a lossmaking project. If you’re going to use the power of the state to do that, then you shouldn’t be surprised that this country is getting poorer.” I’m grateful to Guido Fawkes for making this his quote of the day.

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Autumn Statement chart of the day: tax and spending

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The economic facts behind the Autumn Statement, in as far as they are known or forecast, are available in the Economic and Fiscal Outlook from the Office for Budget Responsibility. Table 4.7 provides forecast current receipts. Table 4.18 provides total managed expenditure. So, here’s a chart of current receipts (i.e. tax) and total managed expenditure (i.e. spending) for the next few years: The reality is that the Government intend to increase spending every year of the forecast period and to meet […]

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The Austrians Were Right, Yet Again – Jeffrey A. Tucker – Mises Daily

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Via The Austrians Were Right, Yet Again, Jeffrey A. Tucker sets out the way it is in the USA: After three-plus years of floundering around, a consensus has finally arrived that we are back in recession. Growth is not happening. The meager statistical growth of the past few years — no one dared claim it amounted to full recovery — was probably illusory. He goes on to catalogue the government interventions which have been a failure before quoting some of […]

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On capital, international development and raising the poor out of poverty

Via The Economic Role of Saving and Capital Goods – Mises Institute (emphasis mine): What distinguishes contemporary life in the countries of Western civilization from conditions as they prevailed in earlier ages – and still exist for the greater number of those living today – is not the changes in the supply of labor and the skill of the workers and not the familiarity with the exploits of pure science and their utilization by the applied sciences, by technology. It is […]

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A critique of monetarism

At The Telegraph, Ambrose Evans-Pritchard calls for a further extension to our binge: Tight fiscal policy offset by ultra-loose money is the only option for Europe, the US, and Japan. At The Cobden Centre, Professor Kevin Dowd says that Calls for further monetary expansion are cuckoo, and James Tyler, Chief Executive of Tyler Capital, describes the article as Monetarist whitewash. Contemporary economic thinking takes too many aggregates, amongst its other faults (see for example Money, Bank Credit and Economic Cycles, pp […]

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Capital Gains Tax

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Concerned constituents — including basic rate taxpayers, pensioners and private residential landlords — have written to me about the Government’s proposed changes to Capital Gains Tax (CGT). In this post, I will set out details of the tax, the proposal, the arguments and my position. I conclude that the way to raise CGT revenues is to reduce the rate, ideally to under 10%. CGT and the proposals Via HMRC, “Capital Gains Tax is a tax on the profit or gain […]

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FT.com – Manufacturing fades under Labour

The impact of a poor understanding of the role of interest rates in coordinating the economy through time and of the capital structure of production: The importance of manufacturing to the economy declined more rapidly under Labour administrations since 1997 than it did during the Margaret Thatcher era, according to a Financial Times study. The big winners in the same period were bankers, estate agents and public sector workers, whose sectors’ share of output increased under the Labour governments of […]

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