epsql -- 252d Since you're talking about Austrian economics, this is what Rothbard has to say about interest rates: "Perhaps more fallacies have been committed in discussions concerning the interest rate than in the treatment of any other aspect of economics. It took a long while for the crucial importance of time preference in the determination of the pure rate of interest to be realized in economics; it took even longer for economists to realize that time preference is the only determining factor. Reluctance to accept a monistic causal interpretation has plagued economics to this day." This is an excerpt from page 389 of "Man, Economy, and State" - https://cdn.mises.org/man_economy_and_state_with_power_and_market_3.pdf Your suggestion that perhaps a jury of random citizens should select the interest rates is a fallacy, as was already argued by Hayek in his "The Use of Knowledge In Society" - https://www.econlib.org/library/Essays/hykKnw.html The interest rate is the price of money, so select group of people, however skilled or randomly chosen, should "decide" it. replySince you're talking about Austrian economics, this is what Rothbard has to say about interest rates: "Perhaps more fallacies have been committed in discussions concerning the interest rate than in the treatment of any other aspect of economics. It took a long while for the crucial importance of time preference in the determination of the pure rate of interest to be realized in economics; it took even longer for economists to realize that time preference is the only determining factor. Reluctance to accept a monistic causal interpretation has plagued economics to this day." This is an excerpt from page 389 of "Man, Economy, and State" - https://cdn.mises.org/man_economy_and_state_with_power_and_market_3.pdf Your suggestion that perhaps a jury of random citizens should select the interest rates is a fallacy, as was already argued by Hayek in his "The Use of Knowledge In Society" - https://www.econlib.org/library/Essays/hykKnw.html The interest rate is the price of money, so select group of people, however skilled or randomly chosen, should "decide" it.
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Should Austrian economics care about macroeconomics?I think yes!But Stephan's Livera's guest, Peter At Once, says no. "Sit back and watch what everyone gets up to"When two people trade, they do it because both believe they will be better off. However, let's not forget thatthird parties might benefit too. If I pay a builder to build a restaurant for me in an area that has a shortageof restaurants, then many customers can benefit.There will be cases where two people are close to trading, but they - just about - decide not too. However, ifthe interest rate was just slightly lower, they might decide to trade and that would benefit society overall.Similarly, a lot of harm can be done even if we assume everyone is rationally making the right trades. Anybodyinto game theory knows how bad things can get even with everyone making the "optimal" decision for themselves.I'm not saying that we should keep the exact institutions that we currently have, such as the Fed and Europe'sECB. We're smart people and maybe we can come up with a better way to make interest rate decisions; perhaps ajury of randomly-selected citizens could decide.Finally, on Bitcoin. I stack and hodl because it's good for me. And Bitcoin could be good for the world. ButBitcoin will be harmful on average if we don't think about the macroeconomics30m45s into this: https://youtu.be/lwL5Lbt2_ZI?t=30m45s
Since you're talking about Austrian economics, this is what Rothbard has to say about interest rates:"Perhaps more fallacies have been committed in discussions concerning the interest rate than in the treatment ofany other aspect of economics. It took a long while for the crucial importance of time preference in thedetermination of the pure rate of interest to be realized in economics; it took even longer for economists torealize that time preference is the only determining factor. Reluctance to accept a monistic causalinterpretation has plagued economics to this day."This is an excerpt from page 389 of "Man, Economy, and State" -https://cdn.mises.org/man_economy_and_state_with_power_and_market_3.pdfYour suggestion that perhaps a jury of random citizens should select the interest rates is a fallacy, as wasalready argued by Hayek in his "The Use of Knowledge In Society" -https://www.econlib.org/library/Essays/hykKnw.htmlThe interest rate is the price of money, so select group of people, however skilled or randomly chosen, should"decide" it.
Should Austrian economics care about macroeconomics?
I think yes!
But Stephan's Livera's guest, Peter At Once, says no. "Sit back and watch what everyone gets up to"
When two people trade, they do it because both believe they will be better off. However, let's not forget that third parties might benefit too. If I pay a builder to build a restaurant for me in an area that has a shortage of restaurants, then many customers can benefit.
There will be cases where two people are close to trading, but they - just about - decide not too. However, if the interest rate was just slightly lower, they might decide to trade and that would benefit society overall.
Similarly, a lot of harm can be done even if we assume everyone is rationally making the right trades. Anybody into game theory knows how bad things can get even with everyone making the "optimal" decision for themselves.
I'm not saying that we should keep the exact institutions that we currently have, such as the Fed and Europe's ECB. We're smart people and maybe we can come up with a better way to make interest rate decisions; perhaps a jury of randomly-selected citizens could decide.
Finally, on Bitcoin. I stack and hodl because it's good for me. And Bitcoin could be good for the world. But Bitcoin will be harmful on average if we don't think about the macroeconomics
30m45s into this: https://youtu.be/lwL5Lbt2_ZI?t=30m45s