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…
Who determines interest rates?
For most experts the central bank determines short- term interest rates by setting the target to the benchmark policy rate such as the…
Making sense of correlations in economics
Often we observe that two pieces of data, which are not supposed to have any relationship, appear to have very high visual correlation….
Statistics and the facts of economic reality
The government’s releases of various economic indicators such as GDP, CPI and unemployment receive wide coverage in the media. In a measured and…
Is deflation about general decline in prices?
For most experts deflation is bad news since it generates expectations for a decline in prices. Because of this it is held, consumers…
The balance of payments myth
In March, the US trade account balance stood at a deficit of $50 billion against a deficit of $49.28 billion in February and a…