Credit Markets - Road to Serfdom

The Road to Serfdom…via Credit Markets

– October 7, 2019

The role of bitcoin, and cryptocurrencies more broadly, in a negative interest rate world (as unlikely as that truly is), is twofold.

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The Mythology of Cantillon Effects

– October 2, 2019

To Cantillon all new money had the same redistributive and uneven effects, regardless of whether it was first spent in the real economy or entered the credit markets, reducing interest rates.

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The Most Dangerous Idea in Central Banking

– October 1, 2019

Progressives like Yglesias recognize the danger of money in politics. They should consider the danger of politics in money, as well. And not just when it suits their interests.

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Federal Reserve

The Fed’s Program of Two-Stage Sterilization

– September 25, 2019

In the first stage, it removes a significant amount of base money from circulation by paying interest on excess reserves. In the second stage, it manipulates other accounts at the Federal Reserve that influence the quantity of base money in circulation.

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How Much Independence Has Fed Lost?

– September 24, 2019

The genius of the recent NBER paper, by Duke’s Francesco Bianchi and London Business School’s Howard Kung and Thilo Kind, is that it directly measures the effect of President Donald J. Trump’s tweets critical of the Federal Reserve on the Federal Funds Rate, a key overnight interbank interest rate.

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The Economics of Seigniorage on Excess Reserves

– September 21, 2019

The greater the unwinding of the balance sheet, the greater will be the difficulty of servicing federal debt. This problem is on the horizon. It will be met by a combination of dollar devaluation, reduction of the budget, or default.

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Negative INterest Rate

Negative Interest Rate Policy and the Federal Debt

– September 20, 2019

If President Trump wants to lower the real cost of government debt, he should urge the Federal Reserve to increase nominal interest rates — not decrease them.

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The Return of the Century Bond

– September 15, 2019

Following the last few years of record-low yields, first on government debt and more recently on private sector debt, we have seen an unexpected twist: the renewal of this long-dead market.

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inflationrate

What’s the Right Inflation Rate?

– September 5, 2019

There is nothing magical about a 2% inflation target. Recognizing that is a much-needed first step toward better Fed policy.

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upsidedown

The Economic Future of a Negative Interest Rate World

– September 3, 2019

In the long run, the deleterious effect of negative interest rates turns economic theory on its head.

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dallas-federal-reserve

The Fed’s Decentralized System and the Spread of Economic Ideas

– August 28, 2019

Reserve Banks brought monetarism and rational expectations into the monetary policy discussion, and, more recently, they have fostered dissenting views on the Fed’s role as a lender of last resort and the effectiveness of quantitative easing.

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twopillars

Judy Shelton and the Dual Mandate Debate

– August 23, 2019

Shelton is right to criticize the full-employment aspect of the Fed’s dual mandate.

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