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Political news kept slipping into the financial section - European style
Food shortage is always and everywhere a monetary phenomenon

Food shortage is always and everywhere a monetary phenomenon

When policy makers mess around with the price mechanism it nearly always have negative consequences – things certainly gets no better when they do that to “solve” problems created by a failed monetary policy. New York Times has a story that confirms this once again.

Central bank rituals and legitimacy

Central bank rituals and legitimacy

One of the most interesting aspects of US monetary policy since 2008 is that while Ben Bernanke certainly is not ignorant of economic history or monetary theory it seems like the Fed under his leadership has not responded nearly as aggressive to the crisis as one should have expected if one from reading Bernanke's academic work. Furthermore, one can question why the Bank of Japan for more than a decade has failed to seriously address the deflationary pressures in the Japanese economy. Similarly why have central banks in for example the Baltic States, Bulgaria and Denmark maintained an unwavering support for keeping their currencies pegged to euro while the euro crisis has continued to escalate?

"The Bacon Standard" (the PIG PEG) would have saved Denmark from the Great Depression

"The Bacon Standard" (the PIG PEG) would have saved Denmark from the Great Depression

Even though I am a Danish economist I am certainly no expert on the Danish economy and I have certainly not spend much time blogging about the Danish economy and I have no plans to change that in the future. However, for some reason I today came to think about what would have been the impact on the Danish economy if the Danish krone had been pegged to the price of bacon rather than to gold at the onset of the Great Depression in 1929. Lets call it the Bacon Standard - or a the PIG PEG (thanks to Mikael Bonde Nielsen for that suggestion).

Nixon was a crook and Arthur Burns was a failed central banker

Nixon was a crook and Arthur Burns was a failed central banker

Back from my trip to Riga and Stockholm and two books had arrived in the mail from Amazon.

PEP, NGDPLT and (how to avoid) Russian monetary policy failure

PEP, NGDPLT and (how to avoid) Russian monetary policy failure

I am sitting in Riga airport and writing this. I have an early (too early!) flight to Stockholm. I must admit it makes it slightly more fun to sit in an airport when you can do a bit of blogging.

Glasner on "Friedman and Schwartz on James Tobin"

Glasner on "Friedman and Schwartz on James Tobin"

David Glasner is a very nice and friendly person, but I have to admit that David always scares me a bit - especially when I disagree with him. For some reason when David is saying something I am inclined to agree with him even if I think he is wrong. There are two areas where David and I see things differently. One the “hot potato” theory of money and two our view of Milton Friedman. I tend to think that the way Nick Rowe - inspired by Leland Yeager - describes the monetary disequilibrium theory make a lot of sense. David disagrees with Nick. Similiarly I have an (irrational?) love of Milton Friedman so I tend to think he is right about everything. David on the other hand is much more skeptical about Friedman.

Should small open economies peg the currency to export prices?

Should small open economies peg the currency to export prices?

Nominal GDP targeting makes a lot of sense for large currency areas like the US or the euro zone and it make sense that the central bank can implement a NGDP target through open market operations or as with the use of NGDP futures. However, operationally it might be much harder to implement a NGDP target in small open economies and particularly in Emerging Markets countries where there might be much more uncertainty regarding the measurement of NGDP and it will be hard to introduce NGDP futures in relatively underdeveloped and illiquid financial markets in Emerging Markets countries.

The ideal central banker spends most of his time golfing

The ideal central banker spends most of his time golfing

Who is the best central banker - one who is very busy with his job or one who is spending most of his/her time on the golf field?

Is Market Monetarism just market socialism?

Is Market Monetarism just market socialism?

The short answer to the question in the headline is no, but I can understand if somebody would suspect so. I will discuss this below.

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