You are browsing the archive for 2013 October 14.

Avatar of admin

by admin

Walter Block: Free Market Environmentalism

October 14, 2013 in Economics

By Walter Block

Walter Block: Free Market Environmentalism

Here I discuss how Free Market Environmentalism is not a contradiction. I argue that adhering to strict Property Rights is best for the environment. I explain The Tragedy of The Commons which is essential within this topic of Free Market Environmentalism. I provide historical examples to buttress the market fighting pollution and species endangerment. I also refute The Malthusian Theory on Slavery which ties in with The Tragedy of Commons and elucidates relevant incentives in this discussion.

…read more

Source: MISES INSTITUTE

Avatar of admin

by admin

David Howden on Fama and Shiller and Asset Prices

October 14, 2013 in Economics

By Mises Updates

prices

Guest Post:The Great Nobel Heist of 2013
By David Howden

The paradox of the awarding of the 1974 Nobel Memorial Prize in Economic Science is really just par for the course. Friedrich Hayek and Gunnar Myrdal shared the prize that year – both for their work on monetary fluctuations and the business cycle. While there were some affinities between the two early in their careers: both used a Wicksellian foundation, stressed the importance of Knightian uncertainty and the role of ex ante expectations versus ex post results in investment decisions. But by the time the elder economists won their Nobels they were almost polar opposites. Hayek had moved to his work on to the social order of a free society while Myrdal had taken on a decidedly more socialistic bent.

This year’s Nobel Prize is shared between three eminent economists, Eugene Fama, Lars Peter Hansen and Robert Shiller. For the purposes of this article commemorating their achievement, I wish to compare Fama and Shiller’s accomplishments, contributions and what the Prize really represents. As we shall see, though both academics won the award for their work on asset prices, their results and conclusions couldn’t be more at odds with each other.

Fama is most famous for this work on the efficient-market hypothesis (EMH). Loosely stated, markets are efficient when all relevant information pertaining to a business is factored into and reflected in its stock’s price. Since future information concerning the stock is not yet known, and cannot be known, there is no way that any investor can “beat” the market. Fama built on this conclusion, and went one step further. Not only can one not beat the market, but any market return will be random – the unknowable nature of the future implies that any stock’s price must follow an unpredictable “random walk”

Such a conception of knowledge and efficiency seriously misconstrues the nature of both concepts. For EMH to hold true, not only must all knowledge be interpreted in the same way by all investors, but the impact of that knowledge must also be identical among everyone! The first statement removes any subjective element from knowledge formation, and in its place the theory is built upon an objective element. The latter statement implies no differences in investors – everyone must have the same goals, interpret new knowledge in an identical way, and even have an identical time preference scale. (Interested readers can …read more

Source: MISES INSTITUTE

Avatar of admin

by admin

VIDEO: Mark Thornton on the three new economics Nobel winners

October 14, 2013 in Economics

By Mises Updates

Mark Thornton discusses the three American winners of the 2013 Nobel Memorial Prize in Economic Sciences.

…read more

Source: MISES INSTITUTE

Avatar of admin

by admin

Libertarians, Don’t Get Too Excited About the Shutdown

October 14, 2013 in Blogs

By Political Zach Foster