Standard consumer theory says that rational consumers will select their consumption of goods A and B such that , with of course the tiny disclaimer that for some pairs of goods, there will be a corner solution; that is, for some goods A and B, some consumers will optimize not according to the preceding expression, [...]
Tags: Black, Boudreaux, employment, Gurri, Hayek, Lin, MC Hammer, Ozimek, Smith, Tabarrok, Ulbright, ZMP hypothesis, ZMU goods
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Karl Smith playfully suggests that it is ironic that Steve Jobs has so many fans among Austrian economists: Apple was principally the complete opposite of the decentralized local-knowledge driven catallaxy that Austrian’s trumpet. It was a highly centralized, tightly controlled integrated company that managed every step of the process from design to retailing. …Apple seemed [...]
Tags: Alchian, Apple, central planning, Coase, Hayek, Jobs, Smith, The Meaning of Competition, The Nature of the Firm, The Use of Knowledge in Society, Uncertainty Evolution and Economic Theory
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“There’s something wrong with everything. In macro; not, you know, in life.” That may not be a verbatim quotation, but I remember Tyler explaining this in PhD macro I, and it has stuck with me. You don’t really understand a school of macroeconomic thought until you can dispassionately evaluate both its strengths and weaknesses. If [...]
Tags: Austrian business cycle theory, Austrian economics, Bachmann, Cowen, Hayek, Kling, Kydland and Prescott, Long and Plosser, macro, Mises, Selgin, Sumner, Tea Party
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This is the 100th blog post on elidourado.com. That may not seem like a lot. Some bloggers write that many in an afternoon. However, that’s not my style; with few exceptions, mostly halting experiments, I’ve tried to write meaty and thoughtful posts. Looking over my oeuvre now it’s clear I did not always succeed. But [...]
When human and physical capital accumulate, output grows. Most people would agree with this statement, but what does it mean? This depends on the meaning of the words capital and output. I don’t offer a precise definition, but both ideas seem to have something to do with useful configurations of matter and information. That is, [...]
Tags: biology, consciousness, economics, entropy, entropy ethics, Hayek, order, physics, thermodynamics
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Welcome to the second installment in our series of discussions of the Most Insightful Articles in economics. This post is going up a little later than I had planned, but hopefully you have stuck around. Today we are discussing Friedrich Hayek’s 1945 article The Use of Knowledge in Society. Whereas Coase invites us to consider [...]
Tags: Arrow, Difficulty in the Concept of Social Welfare, economics, Hayek, local knowledge, Most Insightful Articles, price system, Use of Knowledge in Society
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Welcome to the first installment of our series of discussions of the Most Insightful Articles in economics. Today we are discussing Ronald Coase’s 1937 article The Nature of the Firm. Ronald Coase wrote only a handful of academic journal articles—nearly every one is a blockbuster. He won the Nobel Prize in 1991 “for his discovery [...]
Tags: Coase, economics, Hayek, Most Insightful Articles, Nature of the Firm, transaction costs, Use of Knowledge in Society
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