Monday, 24 July 2017

Monthly Archives October 2014

More money? Or more income?

Posted by Jerry Jordan
October 27, 2014

Sorry to say, money and income are not the same thing! Most people think, “I wish I had some more money.” Economists respond, “No, you don’t. If you really wanted more money, you would simply spend less and add to the balances in your bank accounts and in your wallet. What you really mean to […]

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Beware a magnanimous Fed

October 24, 2014

Across the globe, central banks are highlighting growing trends in income inequality and suggesting that it is their responsibility to help close the gap. At a recent conference at the Federal Reserve Bank of Boston, Janet Yellen, Chair of the Federal Reserve, questioned whether income inequality “is compatible with values rooted in our nation’s history, […]

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Does the Fed set the rate?

October 23, 2014

It drives me nuts when people say the Federal Reserve sets the interest rate. Ditto for claims that the Fed raises or lowers the rate. Basically, any mention of rate setting by the Fed causes the whistle in my head to blow, as steam pours out from my ears. (Unless, of course, they are referring […]

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Wall Street Journal describes the new Cato Institute effort to promote sound money

Posted by Alex Chafuen
October 22, 2014

The Wall Street Journal blog reports that Cato’s new Center for Monetary and Financial Alternatives will have as a goal to “challenge the central bank’s policies and explore alternative ways to manage the U.S. money supply, including but not limited to a return to the gold standard.” The new director, George Selgin, is an outstanding economist, with […]

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Why isn’t monetary policy working?

Posted by Thomas L. Hogan
October 20, 2014

Since 2008, the Fed’s quantitative easing (QE) programs have added more than $4 trillion to the U.S. economy with little noticeable effects. Why isn’t QE working? One issue is that the Fed is paying banks to hold higher cash reserve balances, a policy known as “interest on reserves” (IOR). This policy is intended to make […]

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How does monetary policy affect resource allocation?

October 15, 2014

If monetary policy had no effect on economic performance, there would be no point in having any particular monetary policy in effect. This is the same as admitting that, at least in the short-run, monetary policy does in fact affect resource allocation. How this happens is a delicate and discussed issue in economics. If resource […]

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