Saturday, 07 May 2016
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    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 […]
    Broken Chain

    The money supply and the price level: a broken link?

    April 7, 2016
    This past week, The Association of Private Enterprise Education (APEE) held its annual conference in Las Vegas, Nevada. As always, it was a very interesting event and I would like to take this opportunity to encourage young scholars who are serious about academic research and interested in promoting economic freedom to attend. At the first monetary policy […]
    United States Federal Reserve System symbol.Close up

    Central bank independence and monetary reform

    April 4, 2016
    Most modern economists believe we’d be better off with an independent central bank. If the monetary authority were beholden to the fiscal authority, the latter could cover its expenditures via the inflation tax. But, in doing so, it would subject the economy to costly price hikes with no offsetting benefits in the long run. Experiences […]