Sunday, 20 August 2017

Monthly Archives June 2015

Understanding the Greek crisis

June 30, 2015

As I write these lines, it is almost certain that Greece will default on its debt today, June 30. What led to such a disastrous situation? To understand, we must look back in time to the events leading up to and surrounding today’s expected default. A brief clarification must be made in order to understand […]

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Why free-banking?

June 29, 2015

The need for and convenience of a central bank are usually taken for granted. To say that a central bank is a good institution and, therefore, needed, is not enough. Unfortunately, the assumption that central banks are necessary seems to weigh more heavily than the facts that suggest otherwise. Good and bad are relative terms. […]

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Inflation targeting as a monetary policy rule

June 22, 2015

Among economists who agree that monetary policy should be conducted according to predictable rules, perhaps no proposed rule enjoys greater support than inflation targeting.  In brief, inflation targeting means the central bank conducts monetary policy such that it comes as close as possible to creating (or rather, setting the macroeconomic conditions for markets to create) […]

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Sound money alternatives series

June 19, 2015

Over the next few weeks, the Sound Money Project will be running a series of blog posts exploring free-market monetary alternatives. Our dedicated fellows will prepare a series of posts that explain the principles and importance of the following topics: Nominal GDP targeting Currency board Commodity backed currencies Gold Standard Free banking Interest rate targeting […]

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Why are real interest rates so low?

June 17, 2015

In a recent blog post, Alex Salter discusses the problem of reasoning from a price change in the context of interest rates. Simply put, observing a low interest rate does not necessarily mean that monetary policy is loose (or tight!). Instead, we should consider what caused this price to change. Low real interest rates could […]

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More on money and interest rates

Posted by Jerry Jordan
June 15, 2015

A confusion arising from the popular usage of the word “money” is that bankers claim to lend money and bank customers claim to borrow money. But, people do not increase their indebtedness in order to hold greater idle cash balances! The extension of credit by financial intermediaries does not alter the amount of money in […]

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