Uncertainty

In the “clouds with silver linings” department, the current financial crisis has caused some wonderfully lucid writing about the economics behind the mess. It seems that every day I find an article better than I’ve seen before. Now I have a new candidate for the best: The Artificial Boom @ The Everyday Economist.

Some economists think Hayek offers the most insight; others think that Keynes is the man. These two schools tend to hold the other in disdain. The Everyday Economist draws on both Hayek and Keynes to describe what has happened and what can be done. The bottom line?

Until we begin to take uncertainty seriously and understand the limitations of price level stabilization, no amount of regulation or intervention will prevent such a crisis in the future.

I was not familiar with Keynes focus on uncertainty, but it sure makes sense to me. Read the article.

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