Don’t blame central bankers for persistently low interest rates

– August 23, 2016

Many who are supportive of free markets blame central banks for the low interest rates that have prevailed since the end of the 2007-8 financial crisis.  This is a mistake. Central banks can, in the short run and all else being equal, lower market inte …


Natural rate of interest: Is it that low?

– August 10, 2016

One of the open questions since the subprime crisis is whether or not the natural rate of interest is as low as the federal funds rate. The natural interest rate is the rate that equilibrates production over time. However, this concept is more subtle t …


On the Italian and eurozone doomsday scenario

– July 27, 2016

This article appeared in the June 2016 issue of Globe Asia. On June 23rd, the voters in the United Kingdom (UK) turned a collective thumbs-down on the European Union (EU). The Brexit advocates – the ones who had had enough of the EU’s mandates and regu …


The monetary ripples of Brexit

– July 20, 2016

June 23 will most likely be remembered as a turning point in Britain’s fate, as 17.4 million Britons expressed their desire to sever ties with the European Union (EU) in a historic referendum. The British, and global, economy is facing an imminent clou …


Austerity isn’t failing, big government is

– July 18, 2016

Bill Emmott at Project Syndicate claims that austerity is failing—just look at the poor European recovery after the financial crisis and the weak Japanese economy. Austerity is not working and therefore it is time to turn fiscal and increase government …


Against monetary democracy

– July 13, 2016

Thanks in part to high-profile and controversial public policy since the financial crisis, and to a lesser extent politicians such as Ron and Rand Paul, the monetary and financial arrangements of the United States have become a surprising source of pub …


On Brexit

– July 6, 2016

There has been a strong (and I’m inclined to say emotional) negative reaction to the Brexit. But really, it doesn’t have to be the end of the world for the British economy. Being a member to the European Union (EU) imposes two constraints.  First, ther …


Macro Musings Podcast

– June 28, 2016

If you are a fan of podcasts, let me recommend this relatively new one hosted by David Beckworth at the Mercatus Center. David’s views on the Great Recession are quite similar to those expressed by me and others on this blog. His list of guests to date …


Venezuela vs. Ecuador (Chavismo vs. Chavismo Dolarizado)

– June 24, 2016

This article appeared in the July 2016 issue of Globe Asia. With the arrival of President Hugo Chávez in 1999, Venezuela embraced Chavismo, a form of Andean socialism. In 2013, Chávez met the Grim Reaper and Nicolás Maduro assumed Chávez’ mantle. Chavi …


The Fed’s policies and their consequences for Mexico

– June 21, 2016

This piece originally appeared in Market TrendsBy Edgar Ortiz As mentioned in a previous article, on December 16 of 2015 the Fed announced a rate hike of 0.25 percentage points and Mexico’s central bank followed suit the very next day. The decisio …


The Fed and its dual mandate

– June 20, 2016

This piece originally appeared in Economics21 By Mickey D. Levy For over a decade, the Bernanke- and Yellen-led Federal Reserve have talked incessantly about conducting monetary policy to achieve the Fed’s dual mandate.  The unemployment rate …


Op-ed: The age-old problem of low interest rates

– June 16, 2016

This piece originally appeared in Forbes Earlier this year, Michael Walker of the Fraser Institute in Vancouver, Canada released a paper that deserves the attention of everyone interested in the subjects of central banking, inflation and interest rates …