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'Draghi's framework' - a step in the right direction

'Draghi's framework' - a step in the right direction

It is no secret that I for years have been very critical about the ECB’s conduct of monetary policy. In fact I strongly believe that the mess we in Europe still are in mostly is due to monetary policy failure (even though I certainly do not deny Europe's massive structural problems).

What the SNB should have done

What the SNB should have done

I have got a lot of questions about what I think about the Swiss central bank’s (SNB) decision last week to give up its ‘floor’ on EUR/CHF - effectively revaluing the franc by 20% - and I must admit it has been harder to answer than people would think. Not because I in anyway think it was a good decision – I as basically everybody else thinks it was a terrible decision – but because I so far has been unable to understand how what I used to think of as one of the most competent central banks in the world is able to make such an obviously terrible decision.

Guess what 'currency' underperformed the rouble in 2014

Guess what 'currency' underperformed the rouble in 2014

2014 wasn't exactly a great year for the Russian rouble. However, there is a 'currency', which performed worse than the rouble in 2014...Bitcoin

Great news! Scott Sumner Joins the Mercatus Center at George Mason University

Great news! Scott Sumner Joins the Mercatus Center at George Mason University

Great news - it has just been published that Scott Sumner will join the Mercatus Center at George Mason University and become Ralph G. Hawtrey Chair in Monetary Policy.

Differences in central banker pay illustrates why the euro is not an "optimal currency area"

Differences in central banker pay illustrates why the euro is not an "optimal currency area"

Bloomberg has a great story on differences in the pay of different central bank governors within the euro area.

Grexit, Germany and Googlenomics

Grexit, Germany and Googlenomics

The talk of Greece leaving the euro area - Grexit - is back. Will Grexit actually happen? I don't know, but I do know that more and more people worry that it will in fact happen.

Yet another year of asymmetrical monetary policy - revisiting the Weidmann rule

Yet another year of asymmetrical monetary policy - revisiting the Weidmann rule

Nearly a year ago - January 2 - I wrote a blog post on what I termed the Weidmann rule. In the blog post I argued that the ECB is basically following a rule - named after Bundesbank boss Jens Weidmann - which is asymmetrical. The ECB will tighten monetary conditions in the event of a positive aggregate demand (velocity) shock, but will not ease in the event of a negative demand (velocity) shock to the euro zone economy.

Merry Christmas

Merry Christmas

Dear friends and readers,

The hawks should start advocating NGDP targeting to avoid embarrassment

The hawks should start advocating NGDP targeting to avoid embarrassment

Over the past six years the “hawks” among UK and US central bankers have been proven wrong. They have continued to argue that a spike in inflation was just around the corner because monetary policy was “high accommodative”. Obviously Market Monetarists have continued to argue that monetary policy has not been easy, but rather to tight in the US and the UK – at least until 2012-13.

Importing monetary tightening - the case of Belarus

Importing monetary tightening - the case of Belarus

Everybody has been following events in the Russian markets this week, but fewer have kept an eye on Russia's smaller neighbour Belarus, but the small country is seeing some serious contagion from Russia.

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