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Chain of events in the boom-bust

Chain of events in the boom-bust

In my recent post on "boom, bust and bubbles" I tried to sketch a monetary theory of bubbles. In this post I try to give an overview of what in my view seems to be the normal chain of events in boom-bust and in the formation of bubbles. This is not a theory, but rather what I consider to be some empirical regularities in the formation and bursting of bubbles - and the common policy mistakes made by central banks and governments.

Boom, bust and bubbles

Boom, bust and bubbles

Recently it has gotten quite a bit of attention that some investors believe that there is a bubble in the Chinese property market and we will be heading for a bust soon and the fact that I recently visited Dubai have made me think of how to explain bubbles and if there is such a thing as bubbles in the first bubbles.

The Compensated dollar and monetary policy in small open economies

The Compensated dollar and monetary policy in small open economies

It is Christmas time and I am spending time with the family so it is really not the time for blogging, but just a little note about something I have on my mind - Irving Fisher's Compensated dollar plan and how it might be useful in today's world - especially for small open economies.

How I would like to teach Econ 101

How I would like to teach Econ 101

Recently our friend Nick Rowe commented on what he considers to be wrong arguments by Joseph Stiglitz and Bryan Caplan. Nick obviously is a busy bee because he had time to write his comment in between exams (you might have noticed that the blogging among the Market Monetarist econ professors has gone down a bit recently – they have all been busy with exams I guess…). Nick’s comment and the fact that he was busy with exams inspired me to write this comment.

Monetary policy can't fix all problems

Monetary policy can't fix all problems

You say that when you have a hammer everything looks like a nail. Reading the Market Monetarist blogs including my own one could easing come to the conclusion that we are the "hammer boys" that scream at any problem out there "NGDP targeting will fix it!" However, nothing can be further from the truth.

Scott is right: Recessions are always and everywhere a monetary phenomenon - just look at QRPI

Scott is right: Recessions are always and everywhere a monetary phenomenon - just look at QRPI

Scott Sumner has a couple of fascinating posts on recessions on his blog (see here and here).

US Monetary History – The QRPI perspective: 1970s

US Monetary History – The QRPI perspective: 1970s

I am continuing my mini-series on US monetary history through the lens of my decomposition of supply inflation and demand inflation based on what I inspired by David Eagle have termed a Quasi-Real Price Index (QRPI). In this post I take a closer look at the 1970s.

US Monetary History – The QRPI perspective: 1960s

US Monetary History – The QRPI perspective: 1960s

In my previous post I showed how US inflation can be decomposed between demand inflation and supply inflation by using what I term an Quasi-Real Price Index (QRPI). In the coming posts I will have a look at use US monetary history through the lens of QRPI. We start with the 1960s.

A method to decompose supply and demand inflation

A method to decompose supply and demand inflation

It is a key Market Monetarist position that there is good and bad deflation and therefore also good and bad inflation. (For a discussion of this see Scott Sumner’s and David Beckworth’s posts here and here). Basically one can say that bad inflation/deflation is a result of demand shocks, while good inflation/deflation is a result of supply shocks. Demand inflation is determined by monetary policy, while supply inflation is independent of whatever happens to monetary policy.

Guest post: J’Accuse Mr. Ben Bernanke-San

Guest post: J’Accuse Mr. Ben Bernanke-San

Benjamin Cole is well-known commentator on the Market Monetarist blogs. Benjamin's perspective is not that of an academic or a nerdy commercial bank economist, but rather the voice of the practically oriented advocate of Market Monetarist monetary policies.

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