Monetary Policy

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."
Thursday, April 21st, 2011
"Previous statements about exits by Fed officials simply listed the tools that could be used in an exit strategy, but did not actually put forth an exit strategy. In contrast, President Plosser describes a specific strategy.
Wednesday, April 20th, 2011
"Gold rose above $1,500 an ounce to a record in New York and London as a weaker dollar and concern about debt and faster inflation spurred demand for an alternative investment. Silver reached a 31-year high.
Wednesday, April 20th, 2011
The Conclusion: The native inhabitants of Shell Island were living under growing pressure. For generations they had lived quiet lives tending their coconut trees, weaving their straw hats, and perfecting their massage techniques. With the arrival of the Outsiders, however, things had changed…
Wednesday, April 20th, 2011
"In fact, there's a big difference between the three scenarios before the Fed. One option would be to keep QE2 going after June, continuing to grow the Fed's balance sheet. The second option would be to kill QE2, but keep QE1.5 intact, leaving the size of the Fed's balance sheet unchanged.
Wednesday, April 20th, 2011
"The economics profession not only failed to predict the recent financial crisis, but has been struggling in its aftermath to reach a consensus on the cause(s) of the crisis.
Friday, April 8th, 2011
"The devaluation of the British pound from $2.80 to $2.40 is not only another declaration of the bankruptcy by Great Britain; it is another revelation of the bankruptcy of the international money system concocted at Bretton Woods, N.H., in 1944."
Thursday, April 7th, 2011
The Greenspan-Bernanke explanation on the cause of the financial bubble rests on the theory of the saving glut.
Wednesday, April 6th, 2011
"The Federal Reserve shows few signs of easing its aggressive efforts to stimulate growth before the middle of the year, according to the minutes of the most recent meeting of the central bank’s policy making committee.
Monday, April 4th, 2011
"Most central banks chose to ignore commodity prices, like food and oil, because (1) they are overly volatile and (2) a central bank can’t take any countervailing action.
Wednesday, March 30th, 2011
"The benefit of maintaining price stability in the eurozone as a whole, and thereby keeping the inflation risk low, becomes even greater in times of crisis. At the height of the financial crisis, the ECB lowered interest rates aggressively in the face of downside risks to price stability.
Wednesday, March 30th, 2011
"We have learned much about the unemployment-inflation trade-off and about monetary policy during the last 25 years.
Tuesday, March 29th, 2011
"One would hope that the supposed “great minds” at the Fed and in academic economics would better understand inflation and its destructiveness, but that is not to be. First and most important, the lack of inflation is not the enemy of the economy.
Thursday, March 24th, 2011
"The question of how humans come to trust anonymous others has been addressed by both economists and evolutionary psychologists recently. However, the idea of monetary calculation, as articulated by Ludwig von Mises and other Austrian school economists, is missing from their accounts.