Unintended Monetary Policy Effects – Tale II: ECB Crisis Policies

– July 17, 2017

The Federal Reserve’s (Fed) and European Central Bank’s (ECB) policy responses to the recent financial disasters offer two tales of unintended consequences. Our previous post outlined the undesired effects of the Fed’s policies. In this post, we sugges …


The Regression Theorem: Misconceptions

– July 14, 2017

Four misconceptions of the regression theorem, explained.


Money in Illiberalism

– July 12, 2017

A liberal society is governed by the principles of private property and freedom of contract, under the aegis of a nondiscriminatory rule of law.  In such a society, money enables economic actors to coordinate their activities.  Money allows producers a …


The Monetary Policy Blinders

– July 11, 2017

I just read Ben Bernanke’s “The Federal Reserve and the Financial Crisis.” The book was actually published in 2013, and it contains his 2012 lectures at George Washington University. It contains four well written lectures that cover the history of the …


Cantillon Effects and Money Neutrality

– June 27, 2017

Money neutrality is a key principle in monetary economics. As might seem obvious, the amount of goods that can be produced depends on the availability of factors of production (such as capital and labor) and on technological knowledge.


Money in Liberalism

– June 19, 2017

One feature of a liberal society is that its institutions, and especially its formal institutions with coercive backing, are bound by a nondiscriminatory rule of law, and work to protect the sanctity of property and contract for all persons.  In such a …


Fed’s Balance Sheet, IOR, and Uncertainty

– June 13, 2017

It seems likely that in the coming months monetary policy discussion will start focusing on the problem of shrinking the Fed’s balance sheet. A particular challenge of shrinking the Fed’s balance sheet is that of discontinuing the policy of paying inte …


The Central-Bank Trap: the Real Price of Cheap Money

– June 8, 2017

This piece originally appeared in World Economic Forum At the time of writing, the pace of expansion of the main central banks in the world exceeds $200 billion per month. In fact, in the first four months of 2017, central-bank asset purchases have sur …


IRS Summons of Coinbase Undermines Privacy, Discourages Innovation

– June 7, 2017

The IRS is expected to respond to a recent Congressional inquiry into its summoning records from Coinbase, a San Francisco-based digital currency intermediary, by June 7.


The Institutional Character of Money

– May 31, 2017

On the one hand, money is the language of commerce; money prices are the very medium of economic experience. On the other hand, there seems to be a deeper reality behind the monetary economy. In this scenario, real resource constraints, as described by …


The Politics of Bitcoin

– May 26, 2017

David Golumbia has a new book titled The Politics of Bitcoin: Software as Right-Wing Extremism. It has received less than stellar reviews from Duke University’s Mike Munger and Bitcoin Magazine’s  Giulio Prisco. So, perhaps I am just piling on. But pil …


The Regression Theorem: Practical Applications

– May 23, 2017

Commodity money can emerge naturally. Fiat monies require some form of sovereign support to get off the ground (though, once they have gained circulation, the fixed exchange rate or sovereign backing can be removed).