Stocks and Growth
28 July 2007
The Editor, New York Times
229 West 43rd St.
New York, NY 10036
To the Editor:
Paul Krugman confusedly argues that stock prices are falling, in part, because the global economy is booming ("The Sum of Some Fears," July 27). He asserts that investors now believe that this global boom will keep oil prices high, and he assumes that high oil prices are a significant drag on the value of corporations.
Even if global economic growth will continue to buoy oil prices (which isn't certain), such growth surely puts more upward than downward pressure on stock prices. As people worldwide earn larger incomes to spend and invest, and as global supply networks improve, prospects increase for entrepreneurial American corporations to thrive - as long, that is, as Washington resists the temptation to "protect" us from the growing world economy.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
The Editor, New York Times
229 West 43rd St.
New York, NY 10036
To the Editor:
Paul Krugman confusedly argues that stock prices are falling, in part, because the global economy is booming ("The Sum of Some Fears," July 27). He asserts that investors now believe that this global boom will keep oil prices high, and he assumes that high oil prices are a significant drag on the value of corporations.
Even if global economic growth will continue to buoy oil prices (which isn't certain), such growth surely puts more upward than downward pressure on stock prices. As people worldwide earn larger incomes to spend and invest, and as global supply networks improve, prospects increase for entrepreneurial American corporations to thrive - as long, that is, as Washington resists the temptation to "protect" us from the growing world economy.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Thursday February 14, 2008 at 11:19am