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Spain's quasi-depression - an Austrian 'bust' or a monetary contraction? Or both?

Spain's quasi-depression - an Austrian 'bust' or a monetary contraction? Or both?

A couple of days ago I wrote a post on the behavior of prices in the 'bust' phase of an Austrian style business cycle. My argument was that the Austrian business cycle story basically is a supply side story and that in the bust there is a negative supply shock. As a consequence one should expect inflation to increase during the 'bust' phase.

Margaret Thatcher has died. She will be deeply missed.

Margaret Thatcher has died. She will be deeply missed.

Former UK Prime Minister Margaret Thatcher died earlier today. It is truly sad news.

The Austrian bust: HIGHER inflation and relative deflation

The Austrian bust: HIGHER inflation and relative deflation

I have been thinking about an issue that puzzles me - it is about inflation in an Austrian School style bust.

Duncan Brown's interesting NGDP wonkery

Duncan Brown's interesting NGDP wonkery

If you write a blog you obviously want people to read what you write and even better you want to inspire discussion. I was therefore very happy when Duncan Brown sent me his two latest blog posts, which both are inspired by stuff I have written.

The Global Monetary Policy Network now on Linkedin

The Global Monetary Policy Network now on Linkedin

You will now find the Global Monetary Policy Network on Linkedin. You will find it here.

15 years too late: Reviving Japan (the ECB should watch and learn)

15 years too late: Reviving Japan (the ECB should watch and learn)

After 15 years of deflationary policies the Bank of Japan now clearly is changing course. That should be clear to everybody after today's policy announcement from the Bank of Japan. I don't have a lot of writing here other than I will say this is extremely good news. Good for Japan and good for the global economy and what the BoJ is doing is nearly textbook style monetary easing. The only minus is that the BOJ is targeting inflation and not the NGDP level, but anyway I am pretty convinced this will work and work soon.

Steve Horwitz's "Introduction to US Monetary Policy"

Steve Horwitz's "Introduction to US Monetary Policy"

Steve Horwitz is out with an new paper - "An Introduction to US Monetary Policy". I haven't read the paper yet, but I am sure it is very good. Steve always writes interesting and insightful stuff about monetary policy issues. I hope to find time to read it in the coming days, but until I have more to say about that paper you should have a look. Here is the abstract:

The damage done by ECB's rate hikes in 2011 (the 3-graph version)

The damage done by ECB's rate hikes in 2011 (the 3-graph version)

Since the failure of the Cyprus "bailout" the euro crisis has once again flared up and investors are once again have become nervous about that future of Europe's common currency. I believe most of the present problems dates back to ECB's fatal decision to hike interest rates twice in 2011.

"The Euro: Monetary Unity To Political Disunity?"

"The Euro: Monetary Unity To Political Disunity?"

The re-eruption of the euro crisis as sparked not only economic and financial concerns, but maybe even more important the crisis is now very clearly leading to serious political disunity exemplified by an article the Spanish newspaper El País in, which Chancellor Merkel (somewhat unjustly) was compared to Hitler. And it is pretty clear that Germans are unlikely to get the same level of service if they go on vacation in Spain, Greece or Cyprus this year.

A simple monetary policy rule to end the euro crisis

A simple monetary policy rule to end the euro crisis

It is extremely depressing. After about half year of calm in Europe - mostly due to the efforts of the Federal Reserve and the Bank of Japan - European policy makers have once again messed up and the euro crisis is back on top of the headlines in the financial markets. It is time for the ECB to finally take bold actions and end this crisis once and for all. And no I don't suggest anymore bailouts or odd credit policies and new weird policy instruments. I have a much simpler suggestion and I am pretty sure it would end the crisis very fast.

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