The Fed and asset bubbles
In his speech on April 7 2010 at the Economic Club of New York the President of the New York Fed, William Dudley argued…
Fiscal stimulus and economic growth – are they related?
For most experts a key factor that policy makers should be watching is the gap between the actual real output and the potential real…
What causes the acceptance of paper money?
Demand for a good arises because of its perceived benefit. For instance, people demand food because of the nourishment it offers them. This is…
The Fed and interest rates
Most experts agree that through the manipulation of short-term interest rates, the central bank by means of expectations regarding future interest rate policy can…
Does a fall in unemployment lead to stronger economic growth?
In July, the US unemployment rate fell 0.1% from the month before to 3.9%. The number of unemployed individuals fell by 284,000 to 6.280…
Can deflation undo the damage of inflation?
In our various writings, we have suggested that loose monetary policy of the central bank, which amounts to the lowering of interest rates and…
Why the policy of price stability weakens the process of real wealth formation
There is almost complete unanimity among economists that the most important role of the central bank is to attain price level stability. It is…
Can sophisticated technology prevent severe economic slump?
Most economic commentators are likely to agree that in relation to the period prior to the Great Depression, the present world is many times…
Why gold standard is not conducive of boom-bust cycles?
According to some commentators on the gold standard, an increase in the supply of gold generates similar distortions that money out of “thin…
Does economic growth cause inflation?
Most experts are of the view that as the economy gains strength the Fed must step in at some stage and introduce a tighter…