Saturday, 28 May 2016
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    Bitcoin Falling Apart To Digits

    Decline in the volatility of bitcoin

    May 25, 2016
    Bitcoin is widely considered a highly volatile asset. Both the Consumer Financial Protection Bureau and National Association of Attorneys General have cited volatility as a significant risk of holding bitcoin. One might debate the extent to which volatility is a problem for routine users, but there is no denying that volatility has declined significantly. Eli […]
    Glowing Cross Vector Illustration

    Should Italians be crucified on a cross of euros?

    May 18, 2016
    There is no doubt that ordinary Greeks feel that they have been financially crushed by the foreign-creditor-mandated austerity policies in recent years. The nation’s real output has been declining for several years and the rate of decline understates the contraction of real after-tax incomes of many Greek households. Nevertheless, even a left-wing Greek government has […]
    Dollar question mark

    Monetary policies misunderstood

    May 6, 2016
    Ever since the U.S. Federal Reserve (Fed) began to consider raising the federal funds rate, which it eventually did in December 2015, a cottage industry has grown up around ­­­taper talk. Will the Fed raise rates, or won’t it? Each time a consensus congeals around the answer to that question, all the world’s markets either […]
    Man Hand writing Resilience with black marker on visual screen

    Polycentric banking and financial resilience

    May 4, 2016
    In my previous post, I argued that the institutions underlying laissez-faire banking systems, as approximated by historical cases in Scotland, Canada, and Sweden (among others) provided market actors the incentives and information necessary to maintain aggregate demand stability.  This also means a laissez-faire banking system does a good job of maintaining short-run macroeconomic stability, although this […]
    on the wall of a school children have students painted. symbolic photo for coexistence and migration

    Austrian business cycle theory and the marginal entrepreneur

    April 21, 2016
    A few days ago Alexander W. Salter wrote an interesting post on the problem of optimal resource allocation during an Austrian business cycle. His argument is that the Austrian business cycle theory (ABCT) can be understood within “a framework of rational expectations and ‘equilibrium always’ modeling conventions.” The argument against the ABCT based on rational expectations is that if […]
    helimony

    Helicopter money: dropping money from the sky?

    April 19, 2016
    In the past few years, most major central banks have failed to achieve the higher rates of inflation they claim to want. They tried both “quantitative easing” and “zero-interest-rate policies” with no success. Now there are press reports that in Europe and Japan they are considering “helicopter money.” It is not as easy to give […]
    Bitcoins

    The monetary challenges of bitcoin

    April 14, 2016
    On Tuesday, the Cato Institute hosted an excellent conference on Cryptocurrency: The Policy Challenges of a Decentralized Revolution. I had the pleasure of discussing the monetary challenges of cryptocurrencies in general and bitcoin in particular with George Selgin, Director of the Center for Monetary and Financial Alternatives at the Cato Institute, Perianne M. Boring, Founder […]
    Bank Square Flat Icons

    Polycentric banking?

    April 11, 2016
    One of the most interesting areas within the analysis of governance regimes is the literature on polycentricity.  Polycentric governance systems are characterized by fractured and concurrent authority.  In other words, in polycentric systems, power is decentralized, and there is no final authority that possesses what is typically thought of as sovereignty—the right to make final decisions, beyond which there is no […]