Estonian Austrianism
Building off of his previous posts on the recovery of Estonia's economy, Stefan Karlsson explains how one should strive for the GDP to be at least as high and unemployment at least as low as then.
Building off of his previous posts on the recovery of Estonia's economy, Stefan Karlsson explains how one should strive for the GDP to be at least as high and unemployment at least as low as then.
One thing about聽the article聽that聽I linked to yesterday聽that I didn't mention was that it contained some Austrian, or at least semi-Austrian, insights, expressed by聽Urmas Varblane, professor of economics at the University of Tartu:
I can't speak for Varblane, but this shouldn't be interpreted that it would be wrong if GDP rose back and unemployment fell back to the levels of 2007. Quite to the contrary, one should strive for GDP to be at least as high and unemployment at least as low as then. What it means is instead first of all that it shouldn't be done in the unsound and unsustainable way as then.聽
And secondly that because the 2007 level of production to such a high extent consisted of the production of malinvestments the level of genuine prosperity, production of things that were really wanted, was in fact much lower than GDP figures suggested. This in turn implies that using 2007 as a base year is misleading and that production of genuine prosperity has developed in a much stronger way.