In free markets, we have what I have dubbed balance. I use the term balance advisedly because I want to connote the idea that the market always adjusts to the changes in the behavior of buyers and sellers. I want to distinguish between balance, which I used to note dynamic adjustment, and the frequently used … Continue reading Intervention vs. Balance
Now that we have a precise definition of the word “price,” we can discuss price determination (or priced discovery) of what we refer to as “market price.” We can understand the determination of an individual price by understanding the previously discussed definition of “price.” The individual price results simply from the agreement between buyer and … Continue reading Price Determination—Part Two
President Trump’s threat to impose tariffs on steel and aluminum has triggered a blizzard of articles for and against the proposal. Instead of parroting what has been said by others — mostly empirical evidence, I want to give you the tools with which to understand the issue behind the proposed tariffs: “trade deficits.” Definition To … Continue reading Trade Deficits: An Introduction
Exchanges provide us with the objective information we need to make affirmative statements about market activity and what drives it.
An exchange reveals the relative preferences on the people involved in the exchange.