[Here's another one from a few years back (we'll be back home soon) that featured Greg Ip, formerly of the Wall Street Journal and now in the employ of The Economist. As was the case for this item that appeared here on June 26th, 2007, during the month of June, Greg always had something interesting to write about after BIS Chief (and Austrian Economics sympathizer) William White submitted their annual report.]
A story about Austrian Economics showed up in the Wall Street Journal yesterday – but not in the newspaper. Fed-channeler Grep Ip wrote this in the Real Time Economics Blog:
Amid Financial Excess, a Revival of Austrian Economics
Does the U.S. risk repeating the mistakes that led to the Great Depression? The Bank for International Settlements’ annual report, released Sunday, suggests that it does, and offers a remedy steeped in the doctrine of Austrian economics.
In the 1930s adherents of the “Austrian school,” named for its Austrian-born proponents Ludwig von Mises, Joseph Schumpeter and Friedrich Hayek, argued the Great Depression represented the unavoidable remediation of misallocated credit and overinvestment in the 1920s. The Austrian school largely failed to become orthodoxy as first Keynesian demand management appeared to end the Depression and later monetarism blamed the Depression on inadequate attention to the money supply.
Austrian economics, however, has enjoyed a minor revival in the last decade, most prominently at the Basel, Switzerland-based BIS, which has few formal banking duties but is an important talking shop (it is sometimes called the “central bankers’ central bank.”) The BIS’s leading “Austrian” is a Canadian, William White, the head of the bank’s monetary and economic department and sometimes-rumored successor to retiring Bank of Canada governor David Dodge.