The Disaster of Negative Interest Policy
byThose who had hoped that things could not get worse with the monetary policy of the European Central Bank (ECB) have been proven wrong….
Austrian School
Do banks require savings to accommodate demand for lending?
byThere 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
bySome 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?
byFollowing 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
byOn Wednesday August 14 2019, participants in financial markets were shocked by the news that the differential between the yield on the 10-year…
Deeply negative nominal rates are on their way
byGrowing evidence of a severe global recession is sure to provoke more aggressive monetary policies from central banks. They had hoped to have the…
Does the GDP growth have anything to do with true economic growth?
byTo gain insight into the state of an economy, most financial experts and commentators rely on a statistic called the Gross Domestic Product…
Obvious Capital Consumption
byWe have spilled many electrons on the topic of capital consumption. Still, this is a very abstract topic and we think many people still struggle…
Does the idea of price stability make sense ?
byThe 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
byOn July 11, 2019 before the Senate Banking Committee, the Federal Reserve Board Chairman Jerome Powell said that the relationship between unemployment and…