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Selgin interview on Free Banking

Selgin interview on Free Banking

I just came across this excellent interview with George Selgin on Free Banking. I find it hard to disagree with George on this issue.

Papers about money, regime uncertainty and efficient religions

Papers about money, regime uncertainty and efficient religions

I have the best wife in the world and she has been extremely understanding about my odd idea to start blogging, but there is one thing she is not too happy about and that is that I tend to leave printed copies of working papers scatted around our house. I must admit that I hate reading working papers on our iPad. I want the paper version, but I also read quite a few working papers and print out even more papers. So that creates quite a paper trail in our house...

You don't need presidential debates - the one graph version

You don't need presidential debates - the one graph version

Tonight is the night - Obama vs Romney in the second presidential debate. I am in Europe so I do not plan to stay up all night and watch it. But in fact you don't need to follow presidential debates to have something clever to say about the outcome on election day. All you need is to look at the US stock market and my forecast is that if S&P500 keeps trending upward until election day then Obama will be re-elected. If we get a major sell-off then Romney will soon move into the White House.

The Czech interest rate fallacy and exchange rates

The Czech interest rate fallacy and exchange rates

For many years Ludek Niedermayer was deputy central bank governor of the Czech central bank (CNB). Ludek did an outstanding job at the CNB where he was a steady hand on CNB’s board for many years. I have known Ludek for a number of years and I do consider him a good friend.

Doug Irwin on Market Monetarism and the fed

Doug Irwin on Market Monetarism and the fed

Our friend Douglas Irwin professor of economics at Dartmouth College has an excellent new comment on ft.com on Market Monetarism and Federal Reserve's latest actions.

And the Nobel Prize in economics goes to...
My favourite Chinese monetary graph

My favourite Chinese monetary graph

Imagine a 4% inflation target - this year's Chinese inflation target - trend real GDP growth 10-11% and money-velocity growth between -1% and 0% then the money supply (M1) should grow by 15-16% to ensure the inflation target  in the medium term. This is more or less a description of Chinese monetary policy over the past decade.

"Money neutrality" - normative rather than positive

"Money neutrality" - normative rather than positive

When we study macroeconomic theory we are that we are taught about "money neutrality". Normally money neutrality is seen as a certain feature of a given model. In traditional monetarist models monetary policy is said to be neutral in the long run, but not in the short run, while in Real Business Cycle (RBC) models money is (normally) said to be neutral in both the long and the short run. In that sense "money neutrality" can be said to be a positive (rather than as normative) concept, which mostly is dependent on the assumptions in the models about degree of price and wage rigidity.

Hanke and Krus on "World Hyperinflations"

Hanke and Krus on "World Hyperinflations"

I just read an interesting piece on the escalation of inflation in Iran by Steve Hanke. Steve's Iran piece is interesting enough, but in his article he has a reference a to his recent Cato working paper on "World Hyperinflations". Nicholas Krus is co-author of the paper.

The counterfactual US inflation history - the case of NGDP targeting

The counterfactual US inflation history - the case of NGDP targeting

Opponents of NGDP level targeting often accuse Market Monetarists of being "inflationists" and of being in favour of reflating bubbles. Nothing could be further from the truth - in fact we are strong proponents of sound money and nominal stability. I will try to illustrate that with a simple thought experiment.

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