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"The problem with socialism is you eventually run out of other people's money" - Margaret Thatcher "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design" - F.A. Hayek
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About Me
- Randall Parker
- I am a Professor of Economics at East Carolina University in Greenville, NC. My research focuses on macroeconomics and economic history in general and the economics of the Great Depression in particular. I have authored two books, Reflections on the Great Depression and The Economics of the Great Depression: A Twenty-First Century Look Back at the Economics of the Interwar Era and edited The Seminal Works of the Great Depression. I am currently working on my fourth book Interwar Historical Antecedents of Modern Inflation Targeting and I am the co-editor (with Robert Whaples) of The Handbook of Major Events in Economic History and The Handbook of Modern Economic History. I have also traveled the country giving speeches on the state of the macroeconomy and other economic issues to many trade and business associations. When I am not thinking about the economy I am either chasing ducks, handicapping horses or arranging a fine dining experience. Lastly, the opinions expressed on this blog are mine alone and do not reflect upon East Carolina University in any way or manner, in whole or in part, now and forever more under the canopy of heaven.
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1 comment:
The problems the economy faces in a recession are the problems of resource misallocation. That means that millions of people and businesses miscalculated demand and put money, time, labor, and resources into things that will not pay off. For these millions of small mistakes to be corrected quickly and efficiently prices need to fall and savings need to appreciate because real savings creates real new investment. If the government fights deflation or a stronger dollar with inflationary measures then prices do not fall and savings do not appreciate making reallocation of resources a very difficult and slow process.
The way I see it the Federal Reserve is just a price controller - they control the price of access to money not yet earned. If they lower the price they are stealing demand from the future not helping to create real demand now. I say let natural supply and demand determine the price of loanable funds. Supply and demand has worked better in all other aspects of the economy.
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