Monetary Policy

Wednesday, August 10th, 2011
The turmoils affecting the economics and financial markets in the United States and Europe do not seem to go away as fast as anyone would want to. Those who warned that this may be a crisis with a "W" shape may well be right.
Thursday, July 28th, 2011
Fractional reserves is an important component of financial stability. Most of the financial regulation is aimed to control this aspect of banking practice such that banks do not become insolvent and a contagious set of bank runs gets into the financial markets.
Monday, July 25th, 2011
Article and photo originally published at The Weekly StandardWilliam Kristol July 24, 2011
Monday, May 30th, 2011
"Federal Reserve Bank of Kansas City President Thomas Hoenig, the central bank’s longest-serving policy maker, said the U.S. needs to raise interest rates to encourage individuals to save and avoid future asset bubbles.
Tuesday, May 24th, 2011
"The Fed is blaming the earthquake in Japan for disrupting first quarter global growth, plus droughts and other natural disasters which didn’t help. The problem for Bernanke and his allies on the Fed is that hardly anyone is buying this argument.
Tuesday, May 24th, 2011
"'Stagflation" is an ugly word for an ugly situation: persistent high inflation combined with high unemployment and stagnant demand in a country's economy. The term was coined by British politician Iain Mcleod in a speech to Parliament in 1965.
Wednesday, May 18th, 2011
"The Federal Reserve System is a major sponsor of monetary economics research by American economists.
Wednesday, May 18th, 2011
"Could the U.S. economy use an extra $170 billion right about now? Though the economy has shown fitful signs of growth, that growth is still so fragile that it remains to be seen whether it can withstand setbacks such as the rising price of gasoline.
Friday, May 6th, 2011
"What is needed most is global financial stability. Many worry that the dollar-centred monetary system is sick, leaving some to present radical proposals.
Thursday, May 5th, 2011
"F.A. Hayek said that his biggest regret in a lifetime of writing was that he never wrote a book-length refutation of Keynesian economics. He seriously doubted that Keynesian style planning would ever captivate governments, so he focused on different things.
Wednesday, May 4th, 2011
Over on the Coordination Problem blog, a number of scholars in the field of monetary theory are having an interesting discussion on the topic of Hayek and deflationary spirals. I am providing the link.
Wednesday, May 4th, 2011
"First, the question is not whether the Federal Reserve should raise its target inflation rate above 2% per year. The question is whether the Federal Reserve should raise its target inflation rate to 2% per year.
Wednesday, May 4th, 2011
"The side affect of all of the money supply and low interest rates is that commodity prices continue to rise, which is hitting the middle class rather hard. And with consumers making up 70% of the economy, this is a real drag on real economic growth.
Wednesday, May 4th, 2011

"US Representative Barney Frank introduced a bill yesterday that would block the heads of Federal Reserve regional banks in Boston and elsewhere from voting when they serve on the Fed’s interest-rate-setting panel in Washington.

Thursday, April 28th, 2011
The idea of money neutrality is a cornerstone in formal monetary theory. It is not free, however, of some controversy. If there are changes in money supply, why will the economy converge to the same equilibrium and not to a different one?
Wednesday, April 27th, 2011
"When Federal Reserve Chairman Ben Bernanke makes his debut press conference Wednesday, his every word will be parsed for signs of where he hopes to take U.S. monetary policy.
Tuesday, April 26th, 2011
"No man in America is a match for House Budget Committee Chairman Paul Ryan on the federal budget. No congressman in my lifetime has been more determined to cut government spending. No one is better informed for the task he has set himself.
Monday, April 25th, 2011
Rejecting any serious cuts to government spending, President Obama stated recently, "Nothing is easier than solving a problem on the backs of people who are poor, for people who are powerless and don't have lobbyists or don't have clout."

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