Friday, July 24, 2020

Theory That Allows for Macroeconomic Analysis

Not a day goes by it seems without another call for government spending to aid our failing economy. Policy advice not rooted in sound economic theory is prone to error and when we error in economic policy, it causes real harm to people. Instead of flourishing, we get relative impoverishment.  I have already written on the weaknesses of Keynesian Macro. Robert Murphy has done yeoman work analyzing Modern Monetary Theory.

Here is a lecture I gave at the most recent Mises University. It provides a very broad-brush view of Austrian economics and how it helps us analyze macroeconomic issues and how it differs from Keynesian theory and Modern Monetary Theory: