Friday, 28 July 2017
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    The Inflation Tax

    July 20, 2017
    Can you name an official at a major central bank who expresses worries that inflation is now, or soon will be, too high?  Can you identify any financial publication–even the Wall Street Journal–that does not report that recent inflation data have been “disappointing?” To paraphrase former President Nixon, are we “all inflationists now?” Twenty years […]

    The Regression Theorem: In Light of Bitcoin

    July 18, 2017
    In three previous posts, I have described the regression theorem, discussed its practical applications, and considered some misconceptions. In this post, I will consider the regression theorem in light of bitcoin. The discussion around bitcoin and the regression theorem usually focuses on whether bitcoin has some intrinsic worth (read: non-monetary use). If bitcoin is intrinsically […]

    Unintended Monetary Policy Effects – Tale II: ECB Crisis Policies

    July 16, 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 suggest that the ECB’s stabilization policies did not only fail to achieve its goals. Monetary policy has also […]

    The Regression Theorem: Misconceptions

    July 13, 2017
    In two previous posts, I described the regression theorem and discussed its practical applications. In this post, I will discuss some misconceptions. Misconception 1. The regression theorem only applies to a barter economy. In a recent article, Laura Davidson and Walter Block argue that the regression theorem is only applicable in a barter economy. It […]

    Money in Illiberalism

    July 11, 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 and consumers to find common ground, as profit-and-loss accounting enables producers to compare various lines of […]

    The Monetary Policy Blinders

    July 10, 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 U.S. Federal Reserve and the 2008 financial crisis. Some of the complexities 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. For instance, the fact that more dollars are in circulation does not mean we can produce more […]

    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 society, the general laws of property, contract, torts, etc. govern the provision of […]