Capital-based macroeconomics is defined as the integration of capital structure into macroeconomics. In this lecture Antony Mueller, PhD, analyzes the model and makes some changes to the approach developed by Robert W. Garrison in Time and Money, regarding inflation and deflation. Dr. Mueller explains the importance of capital to achieve economic growth. He talks about the roundabout methods of production (Roundaboutness) and analyzes the Hayekian triangle which shows the stages of production and the relationship between savings and economic growth. He also examines the natural and cyclical production frontiers, talks about the productivity-induced expansion and the money-induced expansion, and gives his point of view regarding the expansive monetary policy that leads to inflation if it is not backed up by higher authentic savings. Dr. Mueller comments on productivity gains, inflation targeting, credit expansion and credit crunch, and finally, compares the Austrian, Keynesian and Monetarist disaggregation.
Antony Mueller
Antony Mueller is professor of Economics at the Universidade de Caxias do Sul, Brazil. He is member of the Institut für Wirtschaftswissenschaft of the Universität Erlangen-Nurembert in Erlangen, Germany, where he studied economy, philosophy and political science. He is adjunct scholar of the Ludwig von Mises Institute in Auburn, Alabama. He also studied in England, France, Spain and in the Center for the Study of Public Choice in Blacksburg, Virginia.
Inflation and Deflation in a New Capital-based Macroeconomic Antony Mueller
Academic Building A-407
Universidad Francisco Marroquín
Guatemala, February 9th, 2006
A production of New Media - UFM Guatemala, February 2006
Camera: Jorge Samayoa; digital editing: Rodrigo Escalante; index: Christiaan Ketelaar; publication: Pedro David España
Slides
Content
Initial Credits
Introduction
What is Capital-Based Macroeconomics?
Components of Capital
Principal Component of Economic Growth
Mainstream Economics: The Austrian Approach
The Old Methodology
The Capital-Based Macroeconomics
The Roundaboutness
Implications of Production
Entrepreneurial Action
Modeling Capital as "Hayekian Triangle"
Savings and Economic Growth
Savings-Induced Capital Restructuring
Productions Frontiers
Natural Production Frontiers
Cyclical Production Frontiers
Productivity-Induced Expansion
Money-Induced Expansion
Effect on the Production Structure
The Consequence of
Higher Inflation
The Soviet, Cuban and other Latin American Countries' Policy
The Growth and Debt Strategy
The German Unification Model: Forced Saving Strategy
Productivity Gains and Inflation Targeting
Inflation Targeting
Effects on Production Frontier
Government and Consumption Credit-Driven Expansion
Banking System as an Amplifier of the Monetary Impulses from the Central Bank
Monetarist Theories
Types of Disaggregation
Equation of Exchange
Monetarist View
The Downfall of the Monetarism Model
Comparisons of Each View
Questions
Why there a are various approaches to this problem?
Why did England kept the Gold Standard for many years?
What is the difference between Active and Passive Monetary Policy?
What is the risk of increasing the money supply?
What is the optimal quantity of money for each view?
Is electronic money going to discipline the government?
What are the disadvantages of a deflationary trend?
Final Words
Final Credits
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Universidad Francisco Marroquín
6 Calle final, zona 10
Edificio de la Escuela de Negocios
Oficina EN-103
Guatemala, Guatemala 01010
Teléfono (+502) 2338-7700 ext. 7876
Slides
