The best an introductory series can do is introduce the learner to the different theories. This nails it. MRU is impressive, because it dares to give legitimate attention to theories that are not currently fashionable in most of academia, but theories which nonetheless provide much insight where other theories turn a blind eye, theories which look for causes rather than mere treatment of symptoms. They are conducting themselves as an ideal professor, encouraging critical analysis of every perspective instead of being a disciple of one and dismissive of the rest.
@@MarginalRevolutionUniversity You bet. Shoot me a google hangouts message or invite sometime with any advice on getting through an interventionist econ grad program and then becoming part of an awesome org like yours, remotely if possible. Don't want to move my wife and 3 kids away from good public schools, ext'd family and my rent houses..
I have never enjoyed learning about Economics, or anything for that matter, as much as I do when I watch these videos from MRU. Thank you very much for the effort.
I think the fatal flaw of Keynesianism (and I suppose monetarism) is that it conflates currency changing hands with productivity and wealth generation. You can't just pump currency into an economy and expect it to result in wealth being generated as an outcome of this spending.
The Keynesian explanation is circular, i.e explaining a recession with a drop in demand is saying nothing really, because the drop in demand is the recession.
@@NVera-dz9zw Keynesian economics relies on booms and busts as intrinsic to the business cycle. The explanation is that is how a business cycle works. Austrian attempts to say that these booms and busts would not exist with no government intervention on the other hand, which is why it derives an explanation.
austrians are most probably correct this is an austrian economist in late 2006 ruclips.net/video/jj8rMwdQf6k/видео.html probably the best explanation for the crisis as is not an explanation made without the help of hindsight but listening to it you might think it was made with the help of a time machine
A way of summarizing: the RBC and the Austrians give the explanation for why the crisis appeared in the first place, thus how he could have avoided it entirely. The monetarists give the explanation of how, despite the situation being bad, things could have been not so worst as it ended up being if only the FED had acted sooner. Finally, once the crisis was already taking shape due to the failures pointed out by the monetarists, the Keynesians bring a solution to how minimize the impact (how the fall of GDP could have been lower), and finally, the Austrians and RBC theory reappears pointing out how the recovery could be faster.
It seems that the Austrian and Real Business Cycle Theory are looking at the root causes and the monetarists and Keynesians are looking at how to mitigate the problem after its already arisen. The monetarists, and especially the Keynesians, also seem to have too much faith in a non-omniscient government that doesn't at all behave in the idealized way that they wish it would. Overall I found the Austrian school to have the most satisfactorily explanation, even though it's not even a mainstream school.
Comparing the different theories to a specific situation is *very* interesting (and the character voices keep cracking me up!), but ultimately, you seem to be saying that economists don't really know the answer. You're sort of hoping that you can integrate the various theories to put together a more comprehensive, if still incomplete, answer. But, as you note, the different schools of thought call for different solutions, so they can't all be right, and perhaps not even partially right.
I think all of them agree that all of those causes and solutions are important, but they differ when it comes to say which is the most important or influential of all.
The best an introductory series can do is introduce the learner to the different theories. MRU is impressive because it dares to give legitimate attention to theories that are not currently fashionable in most of academia, but which provide much insight where other theories stop. They are conducting themselves as an ideal professor, encouraging critical analysis of every perspective instead of being a disciple of one and dismissive of the rest.
Do you guys have a video about this now? Like how the covid crisis compares with the 2008 crisis and how and why the fed is acting like they are acting now?
I side with the Austrian model. If you keep landing easy money to all people with not enough education and a sense of financial knowledge, they will keep investing money on the things that they heard on the street. In the end all the money will be wasted and the rest of the society will pay their debts...
The economy died in 2008, it's been on life support since then with experimental solutions, they will continue until they put this new system together.
Keynesians feel government spending was constrained? Failed to keep up government share of aggregate demand? Do K's ignore the$831 billion? Brings the saying from Everett Dirkson to mind.
G includes both state and local government spending, not just federal spending. Overall government spending was flat throughout the Great Recession, despite a growing population (see www.usgovernmentspending.com/spending_chart_2003_2023USb_F0t).
I may be misreading the charts, but hard to imagine feds at 4 tr. didn't at LEAST make up for S&L at about 1.8 tr. Could it be more a perception of decline rather than actual? E.g. behavioral?
The chart presented did not see that the 800 billion increase was the stimulus, but they kept this increase for the rest of the time. They didn't add more money to said stimulus, but the stimulus was still there. Now it was in different spending, mainly on social safety nets like Obamacare and not on road and public works.
Huh? It was a graph of total government spending at all levels. The point is that from 2008-2016 federal government spending increased but state spending decreased, leaving overall spending level despite an increasing population.
Well it appears that overall, the federal increase in spending in 2009 roughly offset the state/local decrease in nominal dollars (which is roughly fine since inflation was near zero during the GFC); total spending as a % of pop went down (since pop went up); total spending as a % of GDP went up (since GDP went down). I think reasonable to say that falling G wasn't a contributor to the recession, but absent the stimulus it may have been, due to the state/local level cuts. See, e.g., European austerity policy during the GFC.
best video ruclips.net/video/jj8rMwdQf6k/видео.html made in 2006 you might think this video was made after the recession this is the "austrian" school i would rather we start calling then real economics instead but in the mean time
Seth Apex Marx was right in his time. But fast forward over 130 years and capitalism has pretty much eliminated the factory worker class and human capital is in much more important areas now. I do believe that if Marx was alive today he’d try and get his books off the shelves around the world.
I'd like to know what these professors think about Bill Clinton repealing the Glass-Steagall Act and how that contributed perhaps most significantly to the 2008 financial crisis. It's important to remember that quantitative straining happened long before quantitative easing came into the picture all because of socialists who decided to deregulate the capitalist system for hefty kickbacks. That said, I'd also like to know what these professors think of Donald J. Trump's idea of using negative interest rates on reserves to flip the script on quantitative easing and repurchase agreements. In effect, changing the bidirectionality through which those things function as expansionary and contractionary tools. I'd like to know all this because I've recently considered a lot of information that the mainstream media doesn't bring to light. I want to know more about how political parties in the United States that oppose Trump can continue to advocate for a quantitative straining approach instead of a quantitative easing approach. Because when interest on reserves is a negative rate, doesn't that flip the way quantitative easing operates around entirely? Of course, right? So, doesn't that mean what people were thinking is quantitative easing has been straining all along in America's context? In essence, doesn't that mean America has made use of quantitative straining in theory and in practice? In my mind, negative rates of interest on reserves should flip the polarity of open market operations and quantitative 'easing' as contractionary and expansionary policy tools. It's just a thought, but it could very likely be that the socialists who deregulated the Glass-Steagall Act, and the communists who used currency manipulation, were conspiring to steal trillions in social security from America for decades now. That they've been getting away with it for decades. If that's true, all those kickbacks paid to double-agents and political insiders to lobby for deregulating free-market property rights, were like bribes to people, undisclosed or materially misstated sources of income, used to siphon trillions into asset protection trusts offshore. I mean, I saw the Clintons' tax returns. How do you earn millions of dollars from one Blind Trust in the Cayman Islands, interest on investment, unless that principal amount is absolutely huge? But that's beside the point of my main question. All that money owed to America is sitting offshore. How is that the result of quantitative easing? It's not. We all know that. The professors know it, I'm sure. That offshore money in asset protection trusts that refuse to disclose their interests is also funding custody accounts that provide large sums of equity into a particular political group's media bubble. We all know that. It's not even a secret anymore, and that's what scares me. That's very troubling to me, especially seeing as wholly foreign-owned enterprises and variable interest entities are benefiting from that stolen money, even today. The funds that were collateralized without account holders' consent leading up to the crisis was because the investment and commercial banks colluded to bypass credit rating restrictions. The special interest groups who got kickbacks for that betrayed their own country for a quick buck. The sad fact is they got away with it, and now it's taboo to even talk about that? When a large-scale property fraud was exposed early enough in America to avoid a complete collapse, it still leads to a generational debt spiral, which means something is wrong with the bidirectionality of contractionary and expansionary quantitative easing. That's why negative rates of interest on reserves are needed to flip those two things around. America's national debt spiral is a sign that those accounts benefiting from the crisis are not being forced to hedge against the same market risk that reduces their profiteering. With a negative rate of interest on reserves, that whole story changes. Maybe Donald J. Trump isn't as stupid as everyone in the mainstream media is saying? This is curious, very curious.
![BLACK BAG - Official Trailer [HD] - Only in Theaters March 14](http://i.ytimg.com/vi/Du0Xp8WX_7I/mqdefault.jpg)
The best an introductory series can do is introduce the learner to the different theories. This nails it. MRU is impressive, because it dares to give legitimate attention to theories that are not currently fashionable in most of academia, but theories which nonetheless provide much insight where other theories turn a blind eye, theories which look for causes rather than mere treatment of symptoms.
They are conducting themselves as an ideal professor, encouraging critical analysis of every perspective instead of being a disciple of one and dismissive of the rest.
Thank you for the kind words!
-Roman
@@MarginalRevolutionUniversity You bet. Shoot me a google hangouts message or invite sometime with any advice on getting through an interventionist econ grad program and then becoming part of an awesome org like yours, remotely if possible. Don't want to move my wife and 3 kids away from good public schools, ext'd family and my rent houses..
These videos are extremely well-made. The explanations are so thorough and clear. You two are awesome - thank you, and keep making more Econ videos!!
I have never enjoyed learning about Economics, or anything for that matter, as much as I do when I watch these videos from MRU. Thank you very much for the effort.
Glad to hear it! Thank you for your kind words.
-Roman
So true. You guys deserve way more views. Keep it up!
I can"t stop watching this series, it"s the best about economy
The Austrian explanation is most accurate
I think the fatal flaw of Keynesianism (and I suppose monetarism) is that it conflates currency changing hands with productivity and wealth generation. You can't just pump currency into an economy and expect it to result in wealth being generated as an outcome of this spending.
These videos are amazing. I love how the theorists characters chip in
Thank you! We tried to have some fun with those characters!
-Roman
The Keynesian explanation is circular, i.e explaining a recession with a drop in demand is saying nothing really, because the drop in demand is the recession.
The only one offering a cause was the Austrian (unless RCB theorists point to something specific).
@@NVera-dz9zw Keynesian economics relies on booms and busts as intrinsic to the business cycle. The explanation is that is how a business cycle works. Austrian attempts to say that these booms and busts would not exist with no government intervention on the other hand, which is why it derives an explanation.
austrians are most probably correct
this is an austrian economist in late 2006
ruclips.net/video/jj8rMwdQf6k/видео.html
probably the best explanation for the crisis
as is not an explanation made without the help of hindsight but listening to it you might think it was made with the help of a time machine
I hated economics before, now I LOVE IT. Awesome videos......
A way of summarizing: the RBC and the Austrians give the explanation for why the crisis appeared in the first place, thus how he could have avoided it entirely. The monetarists give the explanation of how, despite the situation being bad, things could have been not so worst as it ended up being if only the FED had acted sooner. Finally, once the crisis was already taking shape due to the failures pointed out by the monetarists, the Keynesians bring a solution to how minimize the impact (how the fall of GDP could have been lower), and finally, the Austrians and RBC theory reappears pointing out how the recovery could be faster.
It seems that the Austrian and Real Business Cycle Theory are looking at the root causes and the monetarists and Keynesians are looking at how to mitigate the problem after its already arisen. The monetarists, and especially the Keynesians, also seem to have too much faith in a non-omniscient government that doesn't at all behave in the idealized way that they wish it would. Overall I found the Austrian school to have the most satisfactorily explanation, even though it's not even a mainstream school.
In addressing the remedy, nothing about the mortgages being bad loans??
Comparing the different theories to a specific situation is *very* interesting (and the character voices keep cracking me up!), but ultimately, you seem to be saying that economists don't really know the answer. You're sort of hoping that you can integrate the various theories to put together a more comprehensive, if still incomplete, answer. But, as you note, the different schools of thought call for different solutions, so they can't all be right, and perhaps not even partially right.
I think all of them agree that all of those causes and solutions are important, but they differ when it comes to say which is the most important or influential of all.
The best an introductory series can do is introduce the learner to the different theories. MRU is impressive because it dares to give legitimate attention to theories that are not currently fashionable in most of academia, but which provide much insight where other theories stop.
They are conducting themselves as an ideal professor, encouraging critical analysis of every perspective instead of being a disciple of one and dismissive of the rest.
I loved this video. It was nice to see the business cycle theorists not caricatured.
Great video.
Thank you!
-Roman
Can we discuss World Economy?!
The color of hayek and kayne should switched
great video.
Thanks Vaibhav!
-Roman
Only the Austrian explanation is a real explanation of both the boom and the recession.
The other ones are just descriptions of consequences, they don't even try to explain why it starts in the first place.
Excellent.
Do you guys have a video about this now? Like how the covid crisis compares with the 2008 crisis and how and why the fed is acting like they are acting now?
The Austrian explanation is the most comprehensive out of all of them.
Lol, the Nobel Committee got away with this confusion by giving Nobel Prizes to all of them.
Hayek was amazing
He said about boom and bust and it did happen in 2008
I side with the Austrian model. If you keep landing easy money to all people with not enough education and a sense of financial knowledge, they will keep investing money on the things that they heard on the street. In the end all the money will be wasted and the rest of the society will pay their debts...
The economy died in 2008, it's been on life support since then with experimental solutions, they will continue until they put this new system together.
Keynesians feel government spending was constrained? Failed to keep up government share of aggregate demand? Do K's ignore the$831 billion? Brings the saying from Everett Dirkson to mind.
G includes both state and local government spending, not just federal spending. Overall government spending was flat throughout the Great Recession, despite a growing population (see www.usgovernmentspending.com/spending_chart_2003_2023USb_F0t).
I may be misreading the charts, but hard to imagine feds at 4 tr. didn't at LEAST make up for S&L at about 1.8 tr. Could it be more a perception of decline rather than actual? E.g. behavioral?
The chart presented did not see that the 800 billion increase was the stimulus, but they kept this increase for the rest of the time. They didn't add more money to said stimulus, but the stimulus was still there. Now it was in different spending, mainly on social safety nets like Obamacare and not on road and public works.
Huh? It was a graph of total government spending at all levels. The point is that from 2008-2016 federal government spending increased but state spending decreased, leaving overall spending level despite an increasing population.
Well it appears that overall, the federal increase in spending in 2009 roughly offset the state/local decrease in nominal dollars (which is roughly fine since inflation was near zero during the GFC); total spending as a % of pop went down (since pop went up); total spending as a % of GDP went up (since GDP went down). I think reasonable to say that falling G wasn't a contributor to the recession, but absent the stimulus it may have been, due to the state/local level cuts. See, e.g., European austerity policy during the GFC.
best video
ruclips.net/video/jj8rMwdQf6k/видео.html
made in 2006 you might think this video was made after the recession
this is the "austrian" school i would rather we start calling then real economics instead but in the mean time
Any video about Marx's crisis theory relevant????
Ishan Kashyap Marx was an ass not an economist despite his claims
Ishan Kashyap Marx was an idiot
this channel is meant to give undergraduate material of study in economics , i dont thnk they ever promised a course in voodoo
Marx is not taken seriously because his theories were seriously flawed.
Seth Apex
Marx was right in his time. But fast forward over 130 years and capitalism has pretty much eliminated the factory worker class and human capital is in much more important areas now. I do believe that if Marx was alive today he’d try and get his books off the shelves around the world.
I'd like to know what these professors think about Bill Clinton repealing the Glass-Steagall Act and how that contributed perhaps most significantly to the 2008 financial crisis. It's important to remember that quantitative straining happened long before quantitative easing came into the picture all because of socialists who decided to deregulate the capitalist system for hefty kickbacks.
That said, I'd also like to know what these professors think of Donald J. Trump's idea of using negative interest rates on reserves to flip the script on quantitative easing and repurchase agreements. In effect, changing the bidirectionality through which those things function as expansionary and contractionary tools. I'd like to know all this because I've recently considered a lot of information that the mainstream media doesn't bring to light. I want to know more about how political parties in the United States that oppose Trump can continue to advocate for a quantitative straining approach instead of a quantitative easing approach. Because when interest on reserves is a negative rate, doesn't that flip the way quantitative easing operates around entirely? Of course, right? So, doesn't that mean what people were thinking is quantitative easing has been straining all along in America's context?
In essence, doesn't that mean America has made use of quantitative straining in theory and in practice? In my mind, negative rates of interest on reserves should flip the polarity of open market operations and quantitative 'easing' as contractionary and expansionary policy tools. It's just a thought, but it could very likely be that the socialists who deregulated the Glass-Steagall Act, and the communists who used currency manipulation, were conspiring to steal trillions in social security from America for decades now.
That they've been getting away with it for decades.
If that's true, all those kickbacks paid to double-agents and political insiders to lobby for deregulating free-market property rights, were like bribes to people, undisclosed or materially misstated sources of income, used to siphon trillions into asset protection trusts offshore. I mean, I saw the Clintons' tax returns. How do you earn millions of dollars from one Blind Trust in the Cayman Islands, interest on investment, unless that principal amount is absolutely huge? But that's beside the point of my main question.
All that money owed to America is sitting offshore. How is that the result of quantitative easing? It's not. We all know that.
The professors know it, I'm sure. That offshore money in asset protection trusts that refuse to disclose their interests is also funding custody accounts that provide large sums of equity into a particular political group's media bubble.
We all know that. It's not even a secret anymore, and that's what scares me. That's very troubling to me, especially seeing as wholly foreign-owned enterprises and variable interest entities are benefiting from that stolen money, even today.
The funds that were collateralized without account holders' consent leading up to the crisis was because the investment and commercial banks colluded to bypass credit rating restrictions. The special interest groups who got kickbacks for that betrayed their own country for a quick buck. The sad fact is they got away with it, and now it's taboo to even talk about that?
When a large-scale property fraud was exposed early enough in America to avoid a complete collapse, it still leads to a generational debt spiral, which means something is wrong with the bidirectionality of contractionary and expansionary quantitative easing. That's why negative rates of interest on reserves are needed to flip those two things around.
America's national debt spiral is a sign that those accounts benefiting from the crisis are not being forced to hedge against the same market risk that reduces their profiteering. With a negative rate of interest on reserves, that whole story changes.
Maybe Donald J. Trump isn't as stupid as everyone in the mainstream media is saying?
This is curious, very curious.
Where's the Marxist analysis?
Now i want to be an economist