The market is a yo-yo following the S&P downgrade – investors are searching for stability amid the policy flux created by the current Congress and Administration. Businesses and investors are struggling to create and sustain stable and accurate expectations as to the rules they are likely to face in the future. Steve Horowitz gives…
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Independent Institute Senior Fellow Robert Higgs examines the serious problem of “regime uncertainty” being created by the feasting of federal spending programs starving (crowding out) the private investment needed for recovery from the recession: “Private saving and investment are the heart and soul of the dynamic market process. Together they provide and allocate the…
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It must be a condition of employment that a journalist who writes about the current recession include in his article the statement, �consumption makes up more than two-thirds of the economy� or �consumption spending accounts for 70 percent of GDP.� This seemingly simple, factual statement, however, is nearly always intended to carry some explanatory…
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Private saving and investment are the heart and soul of the dynamic market process. Together they provide and allocate the resources used to augment the economy�s productive capacity, generate sustained long-run economic growth, and thereby make possible a rising level of living. Economic crises interrupt this process by discouraging investors and causing them to…
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Regime uncertainty has gained increasing recognition as the current economic troubles have persisted with little or no improvement since the economy reached a cyclical trough early in 2009. As described in my 1997 paper, regime uncertainty pertains to “the likelihood that investors� private property rights in their capital and the income it yields will…
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