Saturday, 28 March 2015
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    Federal Reserve Bank

    Op-ed: Losing patience with the Fed

    March 19, 2015
    It comes perhaps as no surprise that yesterday’s meeting of the ten voting members of the Federal Open Market Committee (FOMC) ended in an anti-climactic manner, providing no real clarity about the future of interest rates at the Federal Reserve. The removal of the word “patient” simply means that the Fed “has the option to […]
    Exterior of Federal Deposit Insurance Corporation building in Arlington, VA

    Deposit insurance and monetary stability

    March 18, 2015
    Government deposit insurance from the Federal Deposit Insurance Corporation (FDIC) is intended to stabilize the financial system by preventing bank runs and financial contagion. As discussed in a previous blog post, however, most evidence indicatest hat  deposit insurance actually increases bank failures. When bank depositors are insured, banks face less monitoring and tend to take […]

    On regulating bitcoin

    March 17, 2015
    There’s a lot of discussion about regulating cryptocurrencies like bitcoin these days. The New Jersey Legislature’s Assembly Financial Institutions and Insurance Committee had a hearing on February 5th. In the same week, the New York Department of Financial Services’ released a revised draft version of the BitLicense proposal. One can hope that, regardless of whether […]
    Grunge Hazard Stripes Vertical

    The multiple moral hazards of central banking

    March 12, 2015
    In an introductory economics course, students are taught that there is “moral hazard” in the incentives of commercial banks because of access to the “safety net” offered by central banks and the government’s guarantee/insurance of bank deposits. There are a couple dimensions to this. One is that bank managers have less concern about the liquidity […]
    Dollar Usa, Eye. Extreme Closeup.macro

    What is sound money? A macroeconomic perspective

    March 9, 2015
    The term “sound money” means different things to different people. Some stress the stability of purchasing power over time. Some stress the money’s ability to facilitate exchange. Some stress the money’s ability to promote macroeconomic stability. And, at least historically, some have stressed the sound a money makes when clinking against a glass or dropping […]
    Federal Reserve Building

    Sound Money meets the Fed

    March 6, 2015
    In October of last year, while speaking at the Boston Fed, Yellen announced her concern over growing inequality in the United States, revealing that she thought it was “appropriate to ask whether this trend is compatible with values rooted in our nation’s history.” This concern was turned into action on November 14 when she met […]

    Op-ed: Greek solvency requires political reform, support from populace

    March 2, 2015
    A hard currency backed by specie like gold or silver imposes sound economic policies on the nations that use them, but currency established by central bank fiat requires sound policies to be established by political mechanisms in concert with the support of the electorate. In the case of the stagnation in Greece, the European Union […]
    Missing the mark

    Inflation targets and expectations

    February 25, 2015
    This month’s unemployment figures—which were much better than expected—prompted many to speculate that the Fed would begin raising its interest rate target in the near future. Some, including Vox’s Matt Yglesias, object to such a policy on the grounds that inflation remains below the Fed’s stated goal of 2 percent. There’s no denying that inflation […]