By Hendrik Hagedorn
After the latest monetary concern it has turn into transparent that there exists a situation additionally in economics as a technology. the existing paradigms have didn't expect and to appreciate the monetary situation. New techniques are as a result wanted. Of specific curiosity will be techniques that mix insights from these elements of economics which are mostly overlooked via the mainstream. Hendrik Hagedorn offers a version that synthesizes parts of Austrian, post-Keynesian, and evolutionary economics. therefore, an fiscal paradigm is constructed that demanding situations neoclassical economics as a whole.
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Extra resources for A model of Austrian economics
The fact that a productivity gap between workers and machines opens up profit opportunities is also a consequence of the non-specificity of labor and the fact that labor is used in all production processes, including the one of machines. To wit, the cost-reduction possibilities that the use of capital offers must always be understood as relative to the costs of labor that the capital replaces, but the price of labor also constitutes the production costs of machine producers so that, overall, a profit opportunity arises.
Moreover, the banks offer payment services to their customers, which are provided free of charge. The liquidity management of commercial banks distinguishes between three categories of funds that are used for separate purposes. The sight deposits of the customers are only used for the ongoing payments of the depositors. They are left aside in all other activities. Secondly, the pool of loanable funds, which is constituted by the time deposits of the customers, is used to make loans or to redeem time deposits.
Secondly, the pool of loanable funds, which is constituted by the time deposits of the customers, is used to make loans or to redeem time deposits. Finally, the reserves of a bank are either used as a cash reserve or to pay interest and dividends. e. 1). In order to maintain this separation of funds, commercial banks decompose their cash flow into a redemption component and a return component. The interest payments that a bank receives represent a return on investment and are added to the bank’s reserves while the received redemption payments are redirected to the pool of loanable funds.
A model of Austrian economics by Hendrik Hagedorn