Do banks require savings to accommodate demand for lending?
There is an emerging view held by many commentators that it is banks and not the central bank that are key for the expansion…
How fractional reserve banking contributes to increases in money supply
Some commentators consider fractional reserve banking as a major vehicle for the expansion in the money supply growth rate. What is the nature…
Can boom-bust cycles emerge in a free market economy where gold is money?
Following the Austrian Business Cycle Theory (ABCT), the boom-bust cycle emerges in response to a deviation in the market interest rate from the…
The shape of the yield curve and the state of the economy
On Wednesday August 14 2019, participants in financial markets were shocked by the news that the differential between the yield on the 10-year…
Does the GDP growth have anything to do with true economic growth?
To gain insight into the state of an economy, most financial experts and commentators rely on a statistic called the Gross Domestic Product…
Does the idea of price stability make sense ?
The idea of price stability originates from the view that volatile changes in the price level prevent individuals from clearly seeing market signals…
Fed chairman and the Phillips curve
On July 11, 2019 before the Senate Banking Committee, the Federal Reserve Board Chairman Jerome Powell said that the relationship between unemployment and…
Is low inflation a threat to the US economy?
“When interest rates are low central banks don’t have much room to maneuver to deal with a crisis”, The New York Fed President…
Can expectations undo the validity of the Mises’s business cycle theory?
According to Ludwig von Mises’s Austrian Business Cycle Theory (ABCT), the artificial lowering of interest rates by the central bank leads to a…
The illusion of the Keynesian multiplier
For most economists and financial commentators the heart of economic growth is the increase in the demand for goods and services. It is…