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Malinvestment
In Austrian business cycle theory, malinvestments are badly allocated business investments resulting from artificially low interest rates for borrowing and an unsustainable increase in money supply. Central banks are often blamed for causing malinvestments, such as the dot-com bubble and the United States housing bubble. Austrian economists such as F. A. Hayek advocate the idea that malinvestment occurs due to the combination of fractional reserve banking and artificially low interest rates sending out misleading relative price signals which eventually necessitate a corrective contractiona boom followed by a bust. Larry J. Sechrest"Explaining Malinvestment and Overinvestment"(pdf), October 2005, referenced 2010-07-01. In the Austrian business cycle theory and all its different frameworks, the actual definition of malinvestment is the same: an investment with high potential that loses value. A malinvestment only occurs if the loss in value is due to increased interest rates. The c ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Austrian School
The Austrian school is a Heterodox economics, heterodox Schools of economic thought, school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result primarily from the motivations and actions of individuals along with their self interest. Austrian-school theorists hold that economic theory should be exclusively derived from basic principles of human action.Ludwig von Mises. Human Action, p. 11, "Purposeful Action and Animal Reaction". Referenced 2011-11-23. The Austrian school originated in 1871 in Vienna with the work of Carl Menger, Eugen von Böhm-Bawerk, Friedrich von Wieser, and others. It was methodologically opposed to the Historical school of economics, Historical school, in a dispute known as ''Methodenstreit'', or methodology quarrel. Current-day economists working in this tradition are located in many countries, but their work is still referred to as Austrian economics. Among the theoretical contribu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Price Signal
A price signal is information conveyed to consumers and producers, via the prices offered or requested for, and the amount requested or offered of a product or service, which provides a signal to increase or decrease quantity supplied or quantity demanded. It also provides potential business opportunities. When a certain kind of product is in shortage supply and the price rises, people will pay more attention to and produce this kind of product. The information carried by prices is an essential function in the fundamental coordination of an economic system, coordinating things such as what has to be produced, how to produce it and what resources to use in its production. In mainstream (neoclassical) economics, under perfect competition relative prices signal to producers and consumers what production or consumption decisions will contribute to allocative efficiency. According to Friedrich Hayek, in a system in which the knowledge of the relevant facts is dispersed among many ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Ludwig Von Mises
Ludwig Heinrich Edler von Mises (; ; September 29, 1881 – October 10, 1973) was an Austrian-American political economist and philosopher of the Austrian school. Mises wrote and lectured extensively on the social contributions of classical liberalism and the central role of consumers in a market economy. He is best known for his work in praxeology, particularly for studies comparing communism and capitalism, as well as for being a defender of classical liberalismHayek, Friedrich A. "Introduction". In ''Socialism: An Economic and Sociological Analysis'', by Ludwig von Mises. London: Jonathan Cape, 1936. in the face of rising illiberalism and authoritarianism throughout much of Europe during the 20th century. In 1940, Mises emigrated from Austria to the United States to escape the Nazis. On the day German forces entered Vienna, they raided his apartment, confiscating his papers and library, which were believed lost or destroyed until rediscovered decades later in Soviet archive ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Dispersed Knowledge
Dispersed knowledge in economics is the notion that no single agent has information as to all of the factors which influence prices and production throughout the system. The term has been both expanded upon and popularized by American economist Thomas Sowell. Overview Each agent in a market for assets, goods, or services possesses incomplete knowledge as to most of the factors which affect prices in that market. For example, no agent has full information as to other agents' budgets, preferences, resources or technologies, not to mention their plans for the future and numerous other factors which affect prices in those markets. Market prices are the result of price discovery, in which each agent participating in the market makes use of its current knowledge and plans to decide on the prices and quantities at which it chooses to transact. The resulting prices and quantities of transactions may be said to reflect the current state of knowledge of the agents currently in the mar ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Government Failure
In public choice, a government failure is a counterpart to a market failure in which government regulatory action creates economic inefficiency. A government failure occurs if the costs of an intervention outweigh its benefits. Government failure often arises from an attempt to solve market failure. The idea of government failure is associated with the policy argument that, even if particular markets may not meet the standard conditions of perfect competition required to ensure social optimality, government intervention may make matters worse rather than better. As with a market failure, government failure is not a failure to bring a particular or favored solution into existence but is rather a problem that prevents an efficient outcome. The problem to be solved does not need to be market failure; governments may act to create inefficiencies even when an efficient market solution is possible. Government failure (by definition) does not occur when government action creates winne ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Market Failure
In neoclassical economics, market failure is a situation in which the allocation of goods and services by a free market is not Pareto efficient, often leading to a net loss of economic value.Paul Krugman and Robin Wells Krugman, Robin Wells (2006). ''Economics'', New York, Worth Publishers. The first known use of the term by economists was in 1958,Francis M. Bator (1958). "The Anatomy of Market Failure," ''Quarterly Journal of Economics'', 72(3) pp351–379(press +). but the concept has been traced back to the Victorian writers John Stuart Mill and Henry Sidgwick.Steven G. Medema (2007). "The Hesitant Hand: Mill, Sidgwick, and the Evolution of the Theory of Market Failure," ''History of Political Economy'', 39(3)pp. 331��358. 200Online Working Paper. Market failures are often associated with public goods, time-inconsistent preferences, Information asymmetry, information asymmetries, Market structure, failures of competition, principal–agent problems, externalities,Jean-Jacques L ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Demonstrated Preference
Revealed preference theory, pioneered by economist Paul Anthony Samuelson in 1938, is a method of analyzing choices made by individuals, mostly used for comparing the influence of policies on consumer behavior. Revealed preference models assume that the preferences of consumers can be revealed by their purchasing habits. Revealed preference theory arose because existing theories of consumer demand were based on a diminishing marginal rate of substitution (MRS). This diminishing MRS relied on the assumption that consumers make consumption decisions to maximise their utility. While utility maximisation was not a controversial assumption, the underlying utility functions could not be measured with great certainty. Revealed preference theory was a means to reconcile demand theory by defining utility functions by observing behaviour. Therefore, revealed preference is a way to infer preferences between available choices. It contrasts with attempts to directly measure preferences or uti ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Overconsumption
Overconsumption describes a situation where consumers overuse their available goods and services to where they can't, or don't want to, replenish or reuse them. In microeconomics, this is the point where the marginal cost of a consumer is greater than their marginal utility. The term overconsumption is quite controversial and does not necessarily have a single unifying definition. When used to refer to natural resources to the point where the Natural environment, environment is negatively affected, it is synonymous with the term overexploitation. However, when used in the broader economic sense, overconsumption can refer to all types of goods and services, including artificial ones, e.g., "the overconsumption of Alcoholic drink, alcohol can lead to alcohol poisoning." Overconsumption is driven by several factors of the current World economy, global economy, including forces like consumerism, planned obsolescence, economic materialism, and other unsustainable business models, and can ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Johan Henrik Åkerman
Johan Henrik Åkerman (31 March 1896 in Stockholm – July 12, 1982) was a Swedish economist and was a Professor of Economics and Statistics at Lund University. He was the younger brother of Swedish economist Johan Gustav Åkerman. He got an MBA at Stockholm School of Economics 1918. He then studied at Harvard University 1919-20, and again in Sweden, he studied among other statistics in the Universities in Uppsala and Lund. He became PhD in 1929 with a thesis about the economic life rhythm which was the first Swedish dissertation that contained elements of econometrics. "Åkerman's dissertation, on Rhythmics of Economic Life, announced his life-long interest in business cycle theory .There was, in his view, a strict synchronization between short and long cycles. Åkerman's attempts to formulate a theory would involve incorporating a prescient concern with an endogenous business cycle theory reliant in part upon seasonal cycles which, he argued, were correlated with and could p ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Investment
Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broader viewpoint, an investment can be defined as "to tailor the pattern of expenditure and receipt of resources to optimise the desirable patterns of these flows". When expenditures and receipts are defined in terms of money, then the net monetary receipt in a time period is termed cash flow, while money received in a series of several time periods is termed cash flow stream. In finance, the purpose of investing is to generate a Return (finance), return on the invested asset. The return may consist of a capital gain (profit) or loss, realised if the investment is sold, unrealised capital appreciation (or depreciation) if yet unsold. It may also consist of periodic income such as dividends, interest, or rental income. The return may also inclu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Larry J
Larry is a masculine given name in English, derived from Lawrence or Laurence. It can be a shortened form of those names. Larry may refer to the following: People Arts and entertainment * Larry D. Alexander, American artist/writer * Larry Boone, American country singer * Larry Collins, American musician, member of the rockabilly sibling duo The Collins Kids * Larry Carlton (born 1948), American jazz guitarist and singer *Larry David (born 1947), Emmy-winning American actor, writer, comedian, producer and film director * Larry Emdur, Australian television personality * Larry Feign, American cartoonist working in Hong Kong *Larry Fine (1902–1975), American comedian and actor, one of the Three Stooges * Larry Gates, American actor * Larry Gatlin, American country singer * Larry Gayao (better known as Larry g(EE)), Filipino-American soul-pop artist * Larry Gelbart (1928–2009), American screenwriter, playwright, director and author * Larry Graham, founder of American funk band ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
