Monday, 11 December 2017

Monetary Theory

“The Federal Reserve System’s Influence on Research in Monetary Economics” – White

Posted by Tom Duncan
May 18, 2011
in Blog

“The Federal Reserve System is a major sponsor of monetary economics research by American economists. I provide some measures of the size of the Fed’s research program (both inputs and published outputs) and consider how the Fed’s sponsorship may directly and indirectly influence the character of academic research in monetary economics. In particular, I raise […]

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“The Upside-Down World of Modern Monetary Theory” – Murphy

Posted by Tom Duncan
May 11, 2011
in Blog

“Modern Monetary Theory (MMT) is a hip economic/financial paradigm apparently sweeping a world unsatisfied with mainstream economics. Over the past year, I have been hearing a growing number of people refer to MMT: either fans who think it blows up my Austrian views, or foes who think it deserves a full-scale critique. MMT’s underground popularity […]

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Coming Soon to a Bank Near You…the “Hoarders”

Posted by Tyler Watts
May 10, 2011
in Blog

We sound money types lament the disappearance of “good” money like gold and silver coins from day-to-day business. There is something special about these ancient and honorable monies. No, it’s not some Goldmember-style fetish, some psychological affliction known only to “gold bugs.” It’s knowing that the value of your money cannot be inflated away by […]

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A Tiger by the Tail – Hayek

Posted by Tom Duncan
May 5, 2011
in Blog

“F.A. Hayek said that his biggest regret in a lifetime of writing was that he never wrote a book-length refutation of Keynesian economics. He seriously doubted that Keynesian style planning would ever captivate governments, so he focused on different things. Economist Sudha Shenoy decided to rectify the problem. As a Hayek scholar, she noted that […]

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Hayek On Deflation – Coordination Problem

Posted by Tom Duncan
May 4, 2011
in Blog

Over on the Coordination Problem blog, a number of scholars in the field of monetary theory are having an interesting discussion on the topic of Hayek and deflationary spirals. I am providing the link. I recommend a thorough reading of the comments. The post is titled: Hayek on Deflation Steve Horwitz Coordination Problem, May 3, […]

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“Targeting Inflation at 2% Is Too Low” – DeLong

Posted by Tom Duncan
May 4, 2011
in Blog

“First, the question is not whether the Federal Reserve should raise its target inflation rate above 2% per year. The question is whether the Federal Reserve should raise its target inflation rate to 2% per year. On Wednesday afternoon, the Federal Reserve chairman, Ben Bernanke, stated that he was unwilling to undertake more stimulative policies […]

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When Low Inflation is Too High

Posted by Tyler Watts
May 2, 2011
in Blog

Milton Friedman famously stated, “Inflation is always and everywhere a monetary phenomenon.” In other words, whenever you see persistent, high inflation, you know the cause was too much money. When too much money is chasing the same amount of goods, as they say, prices tend to rise; the faster the money supply is increased, the […]

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Neutral Money?

April 28, 2011
in Blog

The idea of money neutrality is a cornerstone in formal monetary theory. It is not free, however, of some controversy. If there are changes in money supply, why will the economy converge to the same equilibrium and not to a different one? If changes in money have a neutral effect in the long run, then […]

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Inflation, Unemployment, and Monetary Policy – Solow and Taylor

Posted by Tom Duncan
March 30, 2011
in Blog

“We have learned much about the unemployment-inflation trade-off and about monetary policy during the last 25 years. Both economic research – especially the research surrounding the rational expectations revolution of the 1970s – and historical experiences – in particular, the inflation and disinflation of the 1970s and 1980s – have contributed to this improved understanding. […]

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Is the Supply of Money a Natural Monopoly?

March 24, 2011
in Blog

In conventional microeconomics the monopoly is associated with inefficiency. Under perfect competition there are no deadweight losses. This means that resources are efficiently allocated. The monopoly, on the other hand, provokes inefficient production by choosing a low level of production. This inefficiency could be reduced by the involvement of the government; that is, by regulation. […]

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“Monetary Calculation and the Extension of Social Cooperation into Anonymity” – Horwitz

Posted by Tom Duncan
March 24, 2011
in Blog

“The question of how humans come to trust anonymous others has been addressed by both economists and evolutionary psychologists recently. However, the idea of monetary calculation, as articulated by Ludwig von Mises and other Austrian school economists, is missing from their accounts. Game theory and evolutionary psychology might tell us why we trade at all […]

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Prosperity and Depression – Harberler

Posted by Tom Duncan
March 24, 2011
in Blog

“Are you serious about business cycle theory? In 1937, back when economists thought big and coherent thoughts about the boom-bust cycle, long before mainstream economists began to doubt the existence of theoretical universals, Professor Gottfried Haberler, an exponent of the Austrian theory, wrote a full and wonderful treatise on the topic. He sought to answer […]

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Larry White on Free Banking and Gold

Posted by Tom Duncan
March 18, 2011
in Blog

Larry White gives a lecture on the benefits of Free Banking and the Gold Standard at the Cato Monetary Conference in November, 2010. Watch it here. Larry White on Free Banking and Gold  Sheldon Richman Anything Peaceful, March 8, 2011.  Via the Foundation for Economic Education. Image by Salvatore Vuono / FreeDigitalPhotos.net.

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“Does Economic Growth Cause Inflation?” – Mises Daily

Posted by Tom Duncan
March 16, 2011
in Blog

“According to mainstream thinking, the stronger the monetary pumping is, the stronger the pace of spending — and consequently the stronger the monetary income and the so-called real economy is going to be. In short, in this framework more money means more spending and this leads to stronger economic growth. Contrary to this way of […]

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“Inflation and Hyperinflation” – John Mauldin

Posted by Tom Duncan
March 15, 2011
in Blog

“In the previous chapter, we discussed why the current crisis presents the real risk of deflation if monetary velocity falls and does not rise. However, there are many reasons to believe that we will not see deflation. The major mistake that deflationists now make is their focus on spare capacity. Central bankers and most economists […]

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“Inflation and You” – Ludwig von Mises

Posted by Tom Duncan
March 11, 2011
in Blog

“The first fact that needs to be noted in answering such questions is that inflation is detrimental to all creditors. The higher prices rise, the lower will fall the purchasing power of the principal and interest payments due. The dollar which was loaned out had a higher purchasing ability, could provide more goods, than the […]

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“Easy Money and the Decapitalization of America” – Cato

Posted by Tom Duncan
February 17, 2011
in Blog

“Federal Reserve monetary policy over the past 15 years or so has produced bubble after bubble,and each bubble (or each group of contemporaneous bubbles) is bigger in aggregate and more damaging than the one that preceded it. Each bubble destroys part of the capital stock by diverting capital into economically unjustified uses—artificially low interest rates […]

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“Lost in a Maze of Monetary Aggregates” – Mises Daily

Posted by Tom Duncan
February 16, 2011
in Blog

“One of the most important concepts in economic theory is the quantity of money. However, when going from theory to practical application, things get messy. In the real world, it’s not obvious how to count up the amount of “money” in the economy at any given time. Because of this ambiguity, economists have developed several […]

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Boudreaux on Monetary Misunderstandings – EconTalk

Posted by Tom Duncan
February 9, 2011
in Blog

“Don Boudreaux of George Mason University talks with EconTalk host Russ Roberts on some of the common misunderstandings people have about prices, money, inflation and deflation. They discuss what is harmful about inflation and deflation, the importance of expectations and the implications for interest rates and financial institutions.” Listen to it here.  Boudreaux on Monetary […]

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“Can Austrian Theory Explain Construction Employment?” – Robert Murphy

Posted by Tom Duncan
January 20, 2011
in Blog

“As a service to readers of the Mises Daily, I immerse myself in the sometimes-stultifying skirmishes of the economics blogosphere. Recently, those arguing that the solution to our current economic woes involves a pumping up of “aggregate demand” seem to have scored a major victory over the economists who believe the housing boom led to […]

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Second Annual Sound Money Essay Contest

Posted by Alex Chafuen
December 30, 2010
in Blog

Is the world economy in crisis because it lacks the fundamentals of sound money?  If you believe that sound money is the key to our recovery, tell us why.    Join Atlas’s 2nd Annual Sound Money Essay Contest and win cash prizes.  This  year’s theme is “Money in Crisis.”  Deadline is January 15th, 2011.

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“Money Rules” – Scott Sumner

Posted by Tom Duncan
December 17, 2010
in Blog

“There is no laissez faire in fiat money. If the Fed holds the money supply constant, it will be changing the interest rate and the price level. And if it holds interest rates constant, it loses control over the price level and money supply. As a result, many economists now favor some sort of inflation-targeting […]

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Ben Bernanke’s Bond Bunk

Posted by Tom Duncan
December 8, 2010
in Blog

“Here’s the problem in the main: Bernanke’s only tool to “tighten” monetary policy means selling bonds into the market and taking in cash from the system. But what happens if he holds bonds that have all gone down in value? He gets screwed, that’s what. In an extreme case, the Fed could go “bankrupt.” Bernanke […]

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Money Printing and 100% Confidence, Day 4

Posted by Tom Duncan
December 8, 2010
in Blog

“[Bernanke is] a different man, somehow, and likely not for the better as growing dissent amongst even his own Federal Reserve board has no doubt made him less confident in his actions today than he was 18 months ago when there was near unanimity from his peers about the decisions that were being made. The […]

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No Doubt Ben Bernanke Is Sincere, But What If He Is Sincerely Wrong?

Posted by Tom Duncan
December 7, 2010
in Blog

“As you no doubt know, Ben Bernanke gave an interview tonight on CBS 60 Minutes. Let me stress once again, as I have in the past, that I consider Ben Bernanke one of the most genuinely nice guys among elite economist I have had the good fortunate to meet. He has no reason to remember […]

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A Guide to Sound Money

_SMP_guide_smallThe Atlas Economic Research Foundation is proud to introduce A Guide to Sound Money.

Click here to download a PDF of the guide

This pocket guide, co-published byAtlasFreedomWorks, offers a concise, powerful introduction to Sound Money principles. Its easy-to-read and compact style makes it a great primer for distribution at conferences and public meetings, where you can help Atlas kindle grassroots interest and activism in the direction of stronger money. The Guide is intended for both educational use by the broader public and as a resource for policy makers when considering monetary issues.

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“Here’s Why the Fed Plan Is Failing: We’re All Austrians Now” – CNBC

Posted by Tom Duncan
November 24, 2010
in Blog

“We may all be Austrians now. Not since the New Deal has Austrian economics enjoyed the political popularity it does now. Austrian economists are awfully popular with the Republican Party, especially its Tea Party wing. Peter Schiff, the Austrian economics-inflected investment advisor, is a very popular guest on business television. Tom Woods’ book “Meltdown”—which provided […]

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“Should the Fed Worry About Unemployment?”

Posted by Tom Duncan
November 19, 2010
in Blog

“One of the things most people don’t realize when they watch the Federal Reserve move the levers of U.S. monetary policy is that its leaders actually wear two hats. The Fed’s marching orders from Congress are to “promote effectively the goals of maximum employment and stable prices.” One of the hottest debates among economists right […]

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“What’s the Bigger Worry: Inflation or Deflation?”

Posted by Tom Duncan
November 19, 2010
in Blog

“If you get $1,000 per month in pension income that is not adjusted each year for inflation, then it will buy you $1000 worth of goods in 25 years assuming no inflation. But, at 2 per cent for 25 years, which is pretty much what we are getting now, the purchasing power of your $1,000 […]

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“Has the Fed Been a Failure?” – Selgin, Lastrapes and White

Posted by Tom Duncan
November 12, 2010
in Blog

“As the one-hundredth anniversary of the 1913 Federal Reserve Act approaches, we assess whether the nation’s experiment with the Federal Reserve has been a success or a failure. Drawing on a wide range of empirical research, we find the following: 1) The Fed’s full history (1914 to present) has been characterized by more rather than […]

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“What the Fed Did and Why” – Bernanke

Posted by Tom Duncan
November 5, 2010
in Blog

“The FOMC decided this week that, with unemployment high and inflation very low, further support to the economy is needed. With short-term interest rates already about as low as they can go, the FOMC agreed to deliver that support by purchasing additional longer-term securities, as it did in 2008 and 2009. The FOMC intends to […]

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“Analysis: Fed’s QE2 Raises Alarm of Commodity Bubble”

Posted by Tom Duncan
November 5, 2010
in Blog

“A commodities buying spree spurred by U.S. quantitative easing has raised alarm of an inflationary bubble reminiscent of 2008 when oil and other industrial raw materials struck all-time highs before the crash. But the Reuters-Jefferies CRB index .CRB, a global commodities benchmark, has since hit a two-year high as part of an 18 percent gain […]

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“Why the Fed’s bold move won’t work”

Posted by Tom Duncan
October 29, 2010
in Blog

“Critics of the Fed — and even someFed members — point to various unintended consequences QE2, including the possibility of a new asset bubble in financial markets, a return of inflation at painful levels, and even a currency or trade war with U.S. trading partners due to a weakening dollar. But some economists say the […]

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“Fear of Currency War Grows as US Dollar’s Value Falls”

Posted by Tom Duncan
October 27, 2010
in Blog

“Is this a currency war or what?… In Washington, where a “strong dollar” has been the mantra for years, policymakers are taking steps that could make the already weak dollar weaker still… The dollar’s decline is being driven by what everyone in global markets is expecting — another round of so-called quantitative easing by the […]

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“Monetary Theory and the Trade Cycle” – F.A. Hayek

Posted by Tom Duncan
October 27, 2010
in Blog

“It seems certain, however, that we shall merely make matters worse if we aim at curing the deflationary symptoms and, at the same time (by the erection of trade barriers and other forms of state intervention) do our best to increase rather than to decrease the fundamental maladjustments. More than that: while the advantages of […]

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Devaluing the Dollar

Posted by Tom Duncan
September 21, 2010
in Blog

“The historical episodes of hyperinflation that we know of consisted of rapidly falling money demand alongside rapidly rising money supply. In general terms, what tends to happen is that after many years of persistently high monetary inflation, people begin to anticipate future monetary inflation. That is, people begin to factor the effects of the expected […]

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“Gold Prices Rise Ahead of Fed”

Posted by Tom Duncan
September 20, 2010
in Blog

“Gold prices were continuing their climb to $1,300 an ounce as investors bet on the Federal Reserve announcing another round of quantitative easing on Tuesday. If the Fed decides to buy more government bonds and expand the size of its balance sheet, it means the central bank will also need to run its printing presses. […]

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Capital and Interest: A Critical History of Economical Theory

Posted by Tom Duncan
September 20, 2010
in Blog

“The intentionally limited task to which I intend to devote myself in the following pages is that of writing a critical history of the theoretical problem of interest. I shall endeavour to set down in their historical development the scientific efforts made to discover the nature and origin of interest, and to submit to critical […]

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“Dallas Fed Chief Not Keen on Buying Long-term Securities”

Posted by Tom Duncan
September 2, 2010
in Blog

“Fisher said a more pressing problem is that recent fiscal and regulatory policies are not necessarily conducive to economic growth – a message he hears from many business contacts. “The prevailing sentiment is that politicians and officials who craft and enforce taxes and rules have been doing so in a capricious manner that makes long-term […]

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“Fed leaders had varied views on August policy action”

Posted by Tom Duncan
September 1, 2010
in Blog

“Federal Reserve officials were divided at their Aug. 10 meeting over whether they should resume purchases of Treasury bonds and what impact the move could have on the nation’s economy, according to minutes released Tuesday. In the end, the Fed’s policymaking committee elected to reinvest money from maturing mortgage securities in government bonds by a […]

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“Fed Off’ls at Jackson Hole Discuss Tough Policy Challenges”

Posted by Tom Duncan
August 26, 2010
in Blog

“Federal Reserve policymakers and many of the world’s other top central bankers are gathering Thursday for their annual retreat and symposium in the shadow of the Grand Tetons. They are also meeting in the shadow of looming economic and financial problems, which seem to be defying the stimulative efforts of both monetary and fiscal policy. […]

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Is There a Government Bond Bubble?

Posted by Tom Duncan
August 25, 2010
in Blog

“YES, there is a government bond bubble. And it’s huge. Uncle Sam and his counterparts in the EU and Japan are broke and are, almost surely, going to print vast quantities of money to cover their enormous spending obligations. The printing presses are already working full time. The Fed, for example, has increased the monetary […]

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Why QE Could Trigger a Collapse of the Dollar

Posted by Tom Duncan
August 23, 2010
in Blog

“A week ago, the Federal Reserve initiated a new program of “quantitative easing” (QE), with the Fed purchasing U.S. Treasury securities and paying for those securities by creating billions of dollars in new monetary base. Treasury bond prices surged on the action. With the U.S. economy predictably weakening, this second round of quantitative easing appears […]

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“Treasure 10-Year Yields Near 17 Month Low”

Posted by Tom Duncan
August 19, 2010
in Blog

“The Fed’s purchases today will be its second this week, after it bought $2.551 billion of notes on Aug. 17. The central bank plans to purchase about $18 billion of U.S. debt by the middle of September using the money from principal payments on its holdings of agency debt and agency mortgage-backed securities, according to […]

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“Fed May Reemerge as Bigger Buyer With Resumption of Treasury Purchases”

Posted by Tom Duncan
August 17, 2010
in Blog

“The Federal Reserve will likely reemerge as the biggest buyer of Treasuries when it resumes purchasing U.S. government securities today to prevent money from draining out of the financial system. JPMorgan Chase & Co. strategists estimate the Fed will buy about $284 billion in Treasuries over the next year, or more than the combined purchases […]

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“Fed Official Warns of Starting a Cycle of Boom and Bust”

Posted by Tom Duncan
August 13, 2010
in Blog

“In a sharply worded dissent to the Federal Reserve’s decision to help ease the supply of credit to the economy, a member of the Fed committee that sets interest rates said Friday that the central bank’s monetary strategy could backfire and touch off a new boom-and-bust cycle. The member, Thomas M. Hoenig, the president of […]

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Idle Resources Don’t Eliminate Inflation

Posted by Steve Horwitz
August 13, 2010
in Blog

One of the gravest sins of modern economics is its tendency to treat resources, both capital and labor, as essentially homogenous aggregates. Capital is more or less interchangeable with other capital, and labor is treated much the same. One reason for this is that such homogeneity and aggregation make mathematical modeling much more tractable, as […]

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“Less than Zero: The Case for a Falling Price Level in a Growing Economy”

Posted by Tom Duncan
August 4, 2010
in Blog

“Not long ago, many economists were convinced that monetary policy should aim at achieving ‘full employment’. Those who looked upon monetary expansion as a way to eradicate almost all unemployment failed to appreciate that persistent unemployment is a non-monetary or ‘natural’ economic condition, which no amount of monetary medicine can cure. Today most of us […]

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“Federal Reserve Information and the Behavior of Interest Rates”

Posted by Tom Duncan
August 4, 2010
in Blog

“This paper tests for the existence of asymmetric information between the Federal Reserve and the public by examining Federal Reserve and commercial inflation forecasts. It demonstrates that the Federal Reserve has considerable information about inflation beyond what is known to commercial forecasters. It also shows that monetary-policy actions provide signals of the Federal Reserve’s information […]

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“Money in the 1920s and 1930s”

Posted by Tom Duncan
August 4, 2010
in Blog

“One of the most enduring and troublesome mysteries in economics is money: how it is created, what sorts of institutions initiate the process, what kinds of mystique and priestcraft central bankers use in managing monetary systems, and what rules, laws, or customs limit their actions. Perhaps the common ignorance about money is harmless. After all, […]

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