by
Mark Blyth
132
The Intellectual History of a Dangerous Idea, 1942-2012
8
terms
2
notes
creative destruction
(en)
the incessant product and process innovation mechanism by which new production units replace outdated ones; coined by Joseph Schumpeter in 1942 as "the essential fact about capitalism"
132
his concept of gales of "creative destruction" that sweep through the economy. Torn asunder by the entrepreneurial utilization of technology, continual organizational innovation, and the rigors of competition, businesses rise and fall, driving the business cycle over time
notable
7 years ago
his concept of gales of "creative destruction" that sweep through the economy. Torn asunder by the entrepreneurial utilization of technology, continual organizational innovation, and the rigors of competition, businesses rise and fall, driving the business cycle over time
notable
7 years ago
Say's Law
(en)
an economic law stating that supply creates its own demand (named after eighteenth-century French economist Jean-Baptiste Say)
137
The policy objective [...] "achievement competition" rather than "impediment competition," whereby the quality of products manufactured would create the demand for them, in a modern supply-side restatement of Say's law.
ordoliberal policy re: German firms
notable
7 years ago
The policy objective [...] "achievement competition" rather than "impediment competition," whereby the quality of products manufactured would create the demand for them, in a modern supply-side restatement of Say's law.
ordoliberal policy re: German firms
notable
7 years ago
ordoliberal
(en)
the German variant of social liberalism that emphasizes the need for the state to ensure that the free market produces results close to its theoretical potential
140
ordoliberalism, ordnungspolitik, and the rest, are all about rules means precisely that good economic governance is not about spending
notable
7 years ago
ordoliberalism, ordnungspolitik, and the rest, are all about rules means precisely that good economic governance is not about spending
notable
7 years ago
pace
(en)
(preposition) with due respect to (someone or their opinion), used to express polite disagreement or contradiction (e.g., "narrative history, pace some theorists, is by no means dead")
142
the liberal path to growth only makes sense if you are an early developer, since you have no competitors--pace the United Kingdom in the eighteenth century and the United States in the nineteenth century. Yet in the contemporary world, development is almost always state led.
notable
7 years ago
the liberal path to growth only makes sense if you are an early developer, since you have no competitors--pace the United Kingdom in the eighteenth century and the United States in the nineteenth century. Yet in the contemporary world, development is almost always state led.
notable
7 years ago
Washington Consensus
(en)
a set of 10 economic policy prescriptions considered to constitute the "standard" reform package promoted for crisis-wracked developing countries by Washington, D.C.–based institutions like the IMF and the World Bank (in a nutshell, neoliberalism); term first used in 1989 by English economist John Williamson
142
the insistence that all developing states follow their liberal instruction sheets to get rich, the so-called Washington Consensus approach to development
notable
7 years ago
the insistence that all developing states follow their liberal instruction sheets to get rich, the so-called Washington Consensus approach to development
notable
7 years ago
debt deflation
(en)
a theory that recessions and depressions are due to the overall level of debt rising in real value because of deflation, causing people to default on loans, which in turns causes bank insolvencies and thus a credit crunch, leading to further recession; developed by Irving Fisher following the Wall Street Crash of 1929
150
depressions do not in fact "right themselves" owing to a phenomenon called debt deflation. Simply put, as the economy deflates, debts increase as incomes shrink, making it harder to pay off debt the more the economy craters
notable
7 years ago
depressions do not in fact "right themselves" owing to a phenomenon called debt deflation. Simply put, as the economy deflates, debts increase as incomes shrink, making it harder to pay off debt the more the economy craters
notable
7 years ago
160
[...] what economists call moral hazard is what normal people call trust. You cannot eliminate the former without destroying the capacity for generating the latter. Without some degree of rule ambiguity and norms of reciprocity, trust cannot emerge. The EU's political project was built on trust, not the elimination of moral hazard. That's why it worked. Its monetary project is based on opposite principles. Yet at the end of the day, how can you run an economy, especially a pan-European monetary economy, without trust as its basis? [...]
[...] what economists call moral hazard is what normal people call trust. You cannot eliminate the former without destroying the capacity for generating the latter. Without some degree of rule ambiguity and norms of reciprocity, trust cannot emerge. The EU's political project was built on trust, not the elimination of moral hazard. That's why it worked. Its monetary project is based on opposite principles. Yet at the end of the day, how can you run an economy, especially a pan-European monetary economy, without trust as its basis? [...]
Washington Consensus
(en)
a set of 10 economic policy prescriptions considered to constitute the "standard" reform package promoted for crisis-wracked developing countries by Washington, D.C.–based institutions like the IMF and the World Bank (in a nutshell, neoliberalism); term first used in 1989 by English economist John Williamson
161
The Washington Consensus was [...] fiscal discipline, reordering public expenditure priorities, tax reform, liberalizing interest rates, (maintaining) a competitive exchange rate, liberalizing trade and foreign direct investment (FDI), privatization, and deregulation
authored by John Williamson in 1989
notable
7 years ago
The Washington Consensus was [...] fiscal discipline, reordering public expenditure priorities, tax reform, liberalizing interest rates, (maintaining) a competitive exchange rate, liberalizing trade and foreign direct investment (FDI), privatization, and deregulation
authored by John Williamson in 1989
notable
7 years ago
a term for the loans provided by the IMF and the World Bank to countries that experienced economic crises, which come with strings attached: privatisation and deregulation, mainly (the conditions are also known as the Washington Consensus)
163
EU policy in the European periphery as little more than a localized set of structural adjustment policies
notable
7 years ago
EU policy in the European periphery as little more than a localized set of structural adjustment policies
notable
7 years ago
172
[...] in the absence of any significant liquidity-constraint, "when spending cuts are perceived as permanent, consumers anticipate a reduction in the tax burden and a permanent increase in their lifetime disposable income." This leads them to spend and invest more today because they perceive that "previously expected large tax increases will not be necessary in the future," which is especially true at higher rates of taxation. When such policies are followed in periods of "fiscal stress," the results are better because the signal that the cuts will be permanent is more credible. [...]
from Alesina and Ardanga's 1998 paper "Tales of Fiscal Adjustment". who tf thinks like this, please tell me
there's a similar one on p174: "Consumers with rational expectations are seen to calculate their lifetime consumption function based on the credibility of the signal to cut spending by the government, and they accurately incorporate these estimates into their private spending decisions."
[...] in the absence of any significant liquidity-constraint, "when spending cuts are perceived as permanent, consumers anticipate a reduction in the tax burden and a permanent increase in their lifetime disposable income." This leads them to spend and invest more today because they perceive that "previously expected large tax increases will not be necessary in the future," which is especially true at higher rates of taxation. When such policies are followed in periods of "fiscal stress," the results are better because the signal that the cuts will be permanent is more credible. [...]
from Alesina and Ardanga's 1998 paper "Tales of Fiscal Adjustment". who tf thinks like this, please tell me
there's a similar one on p174: "Consumers with rational expectations are seen to calculate their lifetime consumption function based on the credibility of the signal to cut spending by the government, and they accurately incorporate these estimates into their private spending decisions."