Monetary theory posits that a change in money supply is a key driver of economic activity. A simple formula, the equation of exchange, governs monetary theory: MV = PQ.

But basing policy on classical economic theory is like basing a contract on philosophy. Effective policy cannot be built from idealized conjectures; it demands realism, and actual facts.

Demand theory relates to the relationship between consumer demand for goods and their prices. More demand can cause higher prices; less demand can reduce them.

One of my favorite examples of economists’ ineffective role in public policy is free trade, which we have been touting since the British classical economist David Ricardo laid out his theory of ...

One framework for understanding markets is the invisible hand theory, an idea proposed by economist Adam Smith that illustrates the hidden, self-interested forces behind people's economic choices.

Examples drawn from a long list of such criteria include: excessive accumulation of dollar reserves; failing to pay NATO obligations in full; taking the side of US adversaries in “key international ...

What is an economic supercycle? An economic supercycle typically refers to a prolonged period of expansion, which can last as long as a few decades. Some ...

Economic theory’s elusive mixture of “scientific” and “artistic” elements is probably what attracted me to it in the first place.

The Quantity Theory of Money may be out of fashion, but it is a useful guide to where the US economy may be headed. September 21, 2022 at 6:30 AM EDT By Tyler Cowen ...

If an economist’s first instinct in researching the effects of minimum-wage laws is to gather data on unemployment and the number of jobs, he needs a price theory refresher. We are not the first to ...