Wednesday, June 8, 2011

Regime uncertainty

Bloomberg: Put Higgs’s Name on That Nobel

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In a Bloomberg report today, “Economic Recovery Is Languishing as Americans Await Signal of Better Times,” Peter Coy casts about for explanations for why the economy is not in recovery, and ends with this offer:
A Nobel prize goes to whoever can end this routine and get America growing again.
OK, Mr. Coy, send the Nobel to Robert Higgs. Your story is a case-study outline of the phenomenon Dr. Higgs dubbed “Regime Uncertainty”. The prescription is straight-forward: get rid of the rash of thousand-page legislation being passed, containing no one knows what or at what cost (e.g., ObamaCare), and stop all bail-outs, “stimulus,” and further diversions of resources from the private sector to the public.
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Comment: Robert Higg's analysis of "regime uncertainty" is probably the best theory brought forth in order to explain the length and depth of the Great Depression. It is a scandal that many economists ignore Higgs' approach. It seems indeed that for many economists ignorance is really bliss.

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