Topic: Inflation

Inflation, Monetary Policy, Sound Money Project

Inflation: It’s Not the Supply Side

– December 31, 2023

” Some combination of fiscal and monetary policy remains the best explanation for the once-in-a-generation inflation rates that peaked in summer 2022, as well as their gradual decline.” ~Alexander W. Salter

Books, Currency, Inflation, Monetary Policy

On Monetary Premia

– December 31, 2023

“One day we might look back at our cottage industry of diversified funds, tax-favored retirement accounts, capital gains taxes, clever accountants, hedge fund managers, Fed watchers, and army of central bank economists as positively medieval.” ~Joakim Book

Economic History, Gold, Inflation

The Golden Constant

– December 27, 2023

“The fear fueling this increase in the demand for gold is that the “unsinkable” ship of state has been so compromised by debt that it now risks slipping under the waves.” ~Clifford F. Thies

Central Banking, Crisis, Inflation, Sound Money Project

Dollarization Is Not Magic

– December 23, 2023

“Rather than dismissing it as magic, one should recognize that dollarization is a pragmatic approach to restoring stability in high-inflation countries that lack credible institutions.” ~Nicolás Cachanosky

Central Banking, Inflation, Monetary Policy, Sound Money Project

Inflation Undershoots Fed Projections

– December 23, 2023

“The FOMC changed course last week, foregoing a previously projected rate hike and projecting deeper rate cuts in 2024 than previously anticipated. But those rate cuts may come too late.” ~William J. Luther

Economic Trends, Inflation, Monetary Policy, Sound Money Project

The Inflationary-Profits Hypothesis is Mush

– December 18, 2023

“Once a bastion of sound reporting, the Wall Street Journal’s economy desk is slowly descending into incoherence…Simple economics demonstrates why the inflationary-profits hypothesis is bunk.” ~Alexander W. Salter

Economic Education, Entrepreneurship, Inflation

Are Entrepreneurs Insufficiently Incited to Compete in Markets that Serve Low-Income People?

– December 17, 2023

“We then must ask: If low-income people are indeed beset by monopoly prices, why don’t entrepreneurs sweep in to compete those prices down to competitive levels?” ~Donald J. Boudreaux

Central Banking, Inflation, Monetary Policy, Sound Money

FOMC Holds Rates, Revises Projections

– December 14, 2023

“After months of worrying that they had not yet done enough, FOMC members now seem to think they have a handle on inflation and will see it gradually return to 2 percent. Let’s hope they are correct.” ~William J. Luther

Business Conditions, Everyday Price Index, Inflation

AIER’s Everyday Price Index Sees Largest Decline in 2023

– December 13, 2023

“While the likelihood of another rate hike in the final FOMC meeting of 2023 this week is low, the slowing rate of disinflation and stubbornly elevated prices suggest that speculation regarding the start of rate cuts is, at best, early.” ~Peter C. Earle

Central Banking, Inflation, Monetary Policy, Sound Money Project

Despite CPI Uptick, Monetary Policy Remains Tight

– December 12, 2023

“The slight bump in inflation won’t spook them into going even tighter. And despite the cries from financial markets, it’s too early to contemplate cuts.” ~Alexander W. Salter

Central Banking, Inflation, Monetary Policy

Argentina’s New President Should Reframe Its Central Bank Even If He Later Proceeds To Eliminate It

– December 12, 2023

“Establishing trustworthy monetary rules is needed to incentivize fiscal responsibility. Constructing robust institutions that allow monetary authorities to act within constraints is even more imperative.” ~Joaquín Henault

Central Banking, Inflation, International, Sound Money Project

Lessons from Argentina’s Dollarization Debate: The Challenge of the Commitment Device

– December 11, 2023

“If a large country like Argentina were to fare better under dollarization, economists would be forced to reconsider the role of central banks in monetary theory.” ~Nicolas Cachanosky