ALL BLOG POSTS
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.
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.
“The Case for Flexible Exchange Rates”
There is no doubt that Milton Friedman is my favourite economist (sorry Scott, you are only number two on the list). In the coming days I will share my interpretation of Friedman’s view of exchange rate policy.
The global stock markets are strongly up today on the latest news from the EU on the deal on Greek debt (and little bit less…). There is no reason to spend a lot of time describing the deal here, but I nonetheless feel it might be a good day to tell a bit about something else – the so-called Hoover Moratorium of 1931.
Recently I have been giving quite a bit attention to the writings Gustav Cassel (and I plan more...), but I have failed to give any attention to the great British monetary economist Raplh G. Hawtrey. That is not really fair - Hawtrey and Cassel lived more or less at the same time and both played important roles in the debate and formulation of monetary policy and monetary thinking around the world in 1920s and 1930s.