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Milton Friedman on exchange rates #4

Milton Friedman on exchange rates #4

Always floating exchange rates?

Hayekian capital theory - the math geek version

Hayekian capital theory - the math geek version

When I wrote my master thesis many years ago the topic was a mathematical formalization of Austrian Business Cycle Theory. In hindsight I think it is incredible that I able to pull it off and I am still pretty happy with that master thesis. It, however, convinced me that Hayek's version of Austrian Business Cycle theory was seriously flawed. Furthermore, the math in my modeling never really satisfied me. It was just not good enough.

"Ben Volcker" and the monetary transmission mechanism

"Ben Volcker" and the monetary transmission mechanism

I am increasingly realising that a key problem in the Market Monetarist arguments for NGDP level targeting is that we have not been very clear in our arguments concerning how it would actually work.

Daylight saving time and NGDP targeting

Daylight saving time and NGDP targeting

Today I got up one hour later than normal. The reason is the same as for most other Europeans this morning – the last Sunday of October - we move our clocks back one hour due to the end of Daylight saving time (summertime).

Milton Friedman on exchange rate policy #3

Milton Friedman on exchange rate policy #3

The fears of economists and politicians with regard to flexible exchange rates can largely be traced back to the policies of the 1920s following the collapse of the gold standard. The most famous criticism of flexible exchange rates is probably that made by the Estonian economist Ragnar Nurkse. Nurkse[1] claimed that the 1920s demonstrated that flexible exchange rates are destabilising.

Bennett McCallum on EconPapers - start downloading NOW!

Bennett McCallum on EconPapers - start downloading NOW!

In a post today Scott Sumner pays tribute to Bennett McCallum. I am as Scott is a big fan of Dr. McCallum (and of Scott).

Christina Romer comes out in support of NGDP targeting

Christina Romer comes out in support of NGDP targeting

The momentum for NGDP targeting is clearly building. Anybody who is interested in monetary policy and in what will be driving the global market sentiment going forward should have a look this issue.

The "China Bluff"

The "China Bluff"

Nick Rowe has a short comment on the news that EU's rescue fund the European Financial Stability Facility (EFSF) will try to tempt China to put money into the rescue fund by issuing bonds in Euros.

"Chinese Silver Standard Economy  and the 1929 Great Depression"

"Chinese Silver Standard Economy and the 1929 Great Depression"

Only two major countries - China and Spain - were not on the Gold Standard at the onset of the Great Depression in 1929. As a consequence both countries avoided the most negative consequences of the Great Depression. That is a forcefully demonstration of how the "wrong" exchange rate regimes can mean disaster, but also a reminder of Milton Friedman's dictum never to underestimate the importance of luck.

Milton Friedman on Exchange rate policy #2

Milton Friedman on Exchange rate policy #2

“The Case for Flexible Exchange Rates”

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