Austrians get (some) mainstream credibility
Well, well: who would have believed it. First the Bank for International Settlements comes out with a paper that links credit booms to the…
Why the Fed will never succeed
The Fed will never succeed in its attempt to manage inflation and unemployment by varying interest rates, because it and its economists do not…
The Fed’s in a bind
One can understand the Fed’s frustration over the failure of its interest rate policy, and its desire to escape the zero bound. However, since…
The truth about GDP
“I can prove anything by statistics except the truth” – George Canning Canning’s aphorism is as valid today as when he was Britain’s Prime…
Advice to the Prime Minister/President
Your country faces a stagnating economy. Let us assume your Prime Minister (or President if that is who holds the executive power) seeks advice…
The declining interest rate cap
Believe it or not, one of the topics in economics that confuses macroeconomists is the actual role of interest rates. For the most part…
From ZIRP to NIRP
The sudden end of the Fed’s ambition to raise interest rates above the zero bound, coupled with the FOMC’s minutes, which expressed concerns about…
Equity markets and credit contraction
There is one class of money that is constantly being created and destroyed, and that is bank credit. Bank credit is created when a…
China chooses her weapons
China’s recent mini-devaluations had less to do with her mounting economic challenges, and more to do with a statement from the IMF on 4…
Welcome to the world of ZIRP zombies
Interest rates in the US, Europe and the UK were reduced to close to zero in the wake of the Lehman crisis nearly seven…