Introduction I have encountered numerous, and very certain statements about the Federal Reserve "changing rates." I cannot, however, figure out how, in a logical and mathematically sound manner, any entity, even The Fed, can unilaterally "change rates." Instead of starting with an explanation of how one calculates interest rates, I thought I would begin with … Continue reading Price Determination and Interest Rates

Introduction All economic theory rests on some assumption about value, but, similar to Newton's vague allusion to gravity, few economists clearly and precisely define the source and measure of value. Even my friends who espouse the Austrian methodology tend to regress to some intrinsic theory of value after they have given a clear and concise … Continue reading Subjective Theory of Value – Expanded

If you want to measure the value of money, don't try. You cannot measure economic value (of anything). It seems a little counter-intuitive to say that one cannot measure the value of money when 1) value plays such an important part in economics and 2) most market exchanges occur with the use of money. Understanding … Continue reading How to Measure the Value of Money