Everything net
Everything relevant to the thought
... Over the years I’ve tried several times to find a version of Austrian business cycle theory I found plausible and I’ve always come away scratching my head. Thread… Here’s my basic understanding of the model: the economy has some industries that are capital intensive and others that are not. ...
... When the central bank makes interest rates artificially low, it makes capital investment cheap and skews the economy toward capital intensive sectors. But that cheap credit hasn’t actually created any real resources, so you end up with increased spending on both capital and consumer goods. ...
... So far this is an entirely conventional account of how business cycles work. But now things get weird. In the Austrian theory, a recession is a process of resource re-allocation from capital-intensive to capital-light industries. ...
... There was arguably over investment in residential home construction. In 2006 and 2007 the home building industry was contracting while other industries were still growing. But in mid 2008, the situation changed. ...
... Instead of re-allocating workers and other resources from home building to other sectors, you suddenly had almost every industry laying off workers—even ones that were not capital intensive and did not see strong growth in the 2000s. ...
... The central question of macroeconomics is explaining why economies sometimes have periods of elevated unemployment, where not just one industry shrinks but almost all of them do at once. ...
... If that were true, then 2009 would have been a time when low-capital industries were aggressively hiring laid off construction workers. That did not happen on any significant scale. Even industries far from housing laid off workers or at least froze hiring in late 2008 and 2009. ...
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... These are also largely global industries, so they won't be constrained by US labor supply. As @DavidBeckworth has argued, there's no reason to think anything has fundamentally changed about the deflationary nature of durable goods industries. ...
... It might take another year or two, especially for car companies waiting for computer chips. But they'll get there. And when they do we should see durables prices start to trend back down again. A bunch more charts that explain the economy here. https://t.co/gtVBWwesGH ...
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... The biggest downturn was in Spain, whose unemployment rate was above 20 percent from 2011 to 2015. Italy had the smallest housing boom in the chart yet still suffered a major downturn in housing prices as tight money strangled its economy. ...
... Looser money could have produced a 10 or 20 percent price drop in housing rather than 30 percent. That would have meant a milder recession and perhaps no financial crisis in 2008. Oops I linked to the wrong article at the top of this thread. ...
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... The vast majority of our (still modest) revenue comes from subscribers. We've also made a small amount syndicating content to @Slate Prior to launching Full Stack Economics, I did some media consulting work for @shortwave, an email startup run by my brother, and earned $2,400. ...
... Our subscription revenues aren't yet close replacing my Ars salary. My wife earns enough as a physician that I can take a big pay cut without a big financial hardship for our family. I'm very lucky. ...
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... OK, one report I was waiting for: the Employment Cost Index. ...
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... You could survey homeowners on their mortgage payments, but then would you price it based on the mortgages people actually pay (which would include people who bought homes 20 years ago and therefore have tiny payments) or what they would pay if they bought their house now? ...
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... I think people mostly still think about the changes of the last 30 years in terms of the tone of political arguments getting nastier: annoying but ultimately not that important. But I think the governments ability to deal proactively with emerging problems has been degraded significantly. ...
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... If I'm reading the numbers right, around 800K bitcoins mined in 2021; at $50K each, that's around 0.2% of US GDP 5/ By contrast, residential investment peaked at almost 7% of GDP and fell by more than 4% 6/ https://t.co/PDSNM4BV7l And there surely isn't enough leveraged buying of crypto to create 2008 ...
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... Major disruptions in businesses will start to appear around 2024 - i.e. profitable (by free cash flow) and hyper-growth companies relying on large-scale neural networks as their main tech strength. ...
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... Compared to 2000, there are less opportunities for retail speculative investing if VCs are providing the lion share of financing for tech companies at earlier stage. ...
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... thanks to the inflow of investment, as during the internet bubble. ...
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... it’s pretty obvious, who you might think”—but he suggests that the AI industry’s culture of publishing its findings openly may soon need to end. ...
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... A system that lets users record their inquiry thoughts/ideas as observations, hypotheses, and predictions (OH&P) can provide a new mode of communication and collaboration between users - they can structurally connect their atomic OH&P directly to other users' OH&P. ...
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