Wednesday, 23 July 2014

Monetary Theory

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

Posted by Tom Duncan
May 18, 2011

“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

“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

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

“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

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

“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

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

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

“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 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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