Sound Banking

Tuesday, July 24th, 2018

Expectations of government bailouts drove the increase and decline of American banks’ market value to book value, according to a new NBER working paper.

Tuesday, June 26th, 2018

The complexity of credit markets creates difficulty for teaching monetary theory purely through reference to observed data. An appropriate framing should follow the evolution of money and credit.

Tuesday, June 19th, 2018

In the case of Argentina, three particular problems call into question the “surprise” explanation of the currency crisis.

Friday, May 11th, 2018

A decade ago, I was a fractional-reserve banking skeptic. Today, I’m all for it. Here’s why.

Wednesday, April 18th, 2018

If the language of commerce is quid pro quo, money is its grammar.

Tuesday, January 30th, 2018

A new NBER paper shows that credit-induced banking panics are the exception, not the rule.

Thursday, December 14th, 2017

The Fed's balance sheet crowds out bank lending, stifling economic growth.

Tuesday, May 2nd, 2017

Americans spend $400 billion dollars per year to comply with the tax code. Americans also dedicate 9 billion hours of labor to comply with the current tax code. Beyond costly compliance, the current tax code distorts investment and work decisions in the economy. Something needs to be done to simplify the tax code and make it pro-growth. 

Friday, April 28th, 2017

When people refer to the national debt, they almost always mean the debt owed by our government. But there are actually two important types of debt in the American economy: government debt, and private debt owed by households and businesses.

Tuesday, April 25th, 2017

Many economists have argued that government mortgage programs and low interest rates policies caused the 2008 financial crisis. We maintain that government deposits insurance, provided in the United States by the Federal Deposit Insurance Corporation (or FDIC), may have also been a contributing factor. By failing to price risk fairly, the FDIC encourages banks to increase their risk-taking activities.

Friday, April 14th, 2017

The level and growth of a nation’s private debt, more than public debt, predicts the worst recessions.

Tuesday, April 11th, 2017

The Bipartisan Budget Act of 2015 suspended the debt ceiling through mid-March of this year. On March 16, the debt ceiling was raised to the current level. When the debt ceiling is reached, the Treasury will not be able to issue more debt to borrow new funds from the public. Instead, the Treasury must take extraordinary measures to raise cash. Extraordinary measures are policies that temporarily lower the national debt by reducing the Treasury securities held by government agencies—known as intragovernmental debt.

Thursday, March 30th, 2017

Ongoing federal budget deficits have required the U.S. Treasury to issue substantial amounts of debt to finance government spending. The Treasury has been able to easily issue debt since the federal government enjoys the highest credit rating, which lowers the interest rate that creditors demand. Historically low interest rates in general have further helped limit interest expense.

Wednesday, February 26th, 2014
by Allan H. Meltzer, Carnegie Mellon University and Hoover Institution
Thursday, May 23rd, 2013
Tuesday, January 29th, 2013
by Adrian Ash AMID the brouhaha over Germany's gold reserves at the Bundesbank, there's another central bank using gold actively to bolster its currency and financial stability.
Monday, January 21st, 2013

The depredations of the Fed.

by Judy Shelton

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