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Monthly Archives July 2015

Why NGDP targeting?

July 22, 2015

One of the most important questions in the field of monetary economics is “what should a central bank do?” It is only after this question is answered that one can begin to think about how a central bank should go about achieving its various target rates. The Federal Reserve, like most central banks, is mostly […]

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Currency boards and dollarization

July 20, 2015

Sometimes sound money has to be imported from abroad. Some countries, like Ecuador, are dollarized. Ecuador dollarized its economy in the year 2000. Others countries don’t go that far, but get quite close, by imposing currency boards. During the 1990s, Argentina had a currency board where 1 Argentine peso could be converted for 1 US […]

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Commodity and commodity-backed currencies

July 15, 2015

A commodity money is an item that individuals consume (or otherwise make use of) that also functions as a commonly accepted medium of exchange. Commodity monies can be contrasted with fiat monies like the modern dollar, euro, yen, etc., which function as commonly accepted media of exchange but are not used for any non-monetary purpose. […]

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Monetary freedom: Australia vs. the United States

Posted by Clancy Bradshaw
July 10, 2015

The following is a contribution by a visiting scholar from the Mannkal Foundation in Australia  According to the 2015 Heritage Foundation index of economic freedom, the United States is ranked 88th out of 186 countries for monetary freedom, with a score of 76.6. The score for monetary freedom is based on two factors: the weighted average inflation […]

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Interest rates, profits and competition

July 9, 2015

Over at the Wall Street Journal, Greg Ip sees a lack of competition in corporate America. He notes that: Competition forces companies to invest in new products and new capacity to hold on to customers and capture new ones. Less-intense competition may thus explain some of the puzzles that hang over the U.S. economy. Profits […]

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NGDP targeting: An overview

July 8, 2015

The prolonged recovery that followed the Great Recession has brought about increased support for a monetary policy rule known as Nominal Gross Domestic Product (NGDP) targeting. This form of targeting combines employment and inflation into one metric. In theory, this would better help the Fed achieve its dual mandate. NGDP targeting focuses on an economy’s […]

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