Monetary Policy
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“Budget Deficits and Inflation”
“The sharp rise in the rate of inflation in 1973, after two years of diminishing rates, was a great surprise to many. What was the primary cause? Many rea-sons have been advanced to explain this change, some of them logical, and some not. Most of the explanations are based, in one way or another, on…
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“Bank of England’s Mervyn King Warns Over Inflation”
“Prices rises have consistently defied the Bank’s expectations of a slowdown, adding to pressure on households as wage growth remains weak and the Government introduces a strict austerity package. The Bank’s rate-setters are charged with keeping inflation at 2% but the Consumer Prices Index benchmark has been above 3% throughout the year. However, addressing a…
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“Money Dominates”
“Financial panics are usually followed by sharp economic snap backs. The post-Panic of 2008 has failed to follow this typical “V-shaped” economic recovery pattern. After almost two years, the U.S. economy remains mired in an anemic recovery, with a current 2.4% year-over-year rate of growth. This paltry growth rate doesn’t even reach the U.S.’s long-term…
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The Great Reflation
“The financial crisis, the speculative bubble leading up to it, and the aftermath have proven once again just how true the old saying is that if you want to know what’s going on in the financial system, watch the banks. The banking system has always been the centerpiece of liquidity flows, and financial markets are…
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The Experience of Free Banking
“There was controversy over how much power the central bank should have and what it should try to do, but no respectable economist suggested that central banking itself was unnecessary or harmful until Hayek finally despaired of it in 1976 and began to argue that the only way to achieve monetary stability was to denationalize…
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“Illinois Free Banking Experience”
“Recent studies by Rolnick and Weber (1983, 1984) have presented evidence challenging the conventional view of the Free Banking Era (1837-1863). The conventional view depicts a period of financial chaos in which lenient regulations gave rise to a plethora of banks, bank notes and coun-terfeit bank notes, unscrupulous “wildcat” bankers, and large noteholder losses. Rolnick…
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“New Evidence on the Free Banking Era”
“The United States has experienced many periods of major banking panics during which a large number of banks have failed and financial markets have been in considerable disarray. The period consid-ered by many as the worst is the one period when banks were more or less left alone to pursue their own profit-motivated interests, the…
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“Free Banking and Information Asymmetry”
“A traditional argument against free banking is that it will collapse because of information externalities: it is impossible for depositors to tell whether a high deposit rate offered by a bank is due to its high efficiency or risky lending strategy. This paper shows that in a separating equilibrium a higher-quality bank offers a lower…
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“Free Banking and Monetary Control”
“Were free banking to reemerge today, it would probably be based, not on a gold standard, but on irredeemable paper (‘fiat’) base money issued by a former or extant central bank. Under this form of free banking, the price level is no longer given, and conventional monetary policy questions remain relevant. In particular, would free…
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“The Gold Standard: A Principled Case”
“In recent months, we have witnessed fierce arguments between, on the one side, those who defend the current system of “fiat money,” in which, as John Maynard Keynes stated, money “is created and issued by the State, but is not convertible by law into anything other than itself, and has no fixed value in terms…
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“Budget Deficits and Inflation”
“The sharp rise in the rate of inflation in 1973, after two years of diminishing rates, was a great surprise to many. What was the primary cause? Many rea-sons have been advanced to explain this change, some of them logical, and some not. Most of the explanations are based, in one way or another, on…
-
“Bank of England’s Mervyn King Warns Over Inflation”
“Prices rises have consistently defied the Bank’s expectations of a slowdown, adding to pressure on households as wage growth remains weak and the Government introduces a strict austerity package. The Bank’s rate-setters are charged with keeping inflation at 2% but the Consumer Prices Index benchmark has been above 3% throughout the year. However, addressing a…
-
“Money Dominates”
“Financial panics are usually followed by sharp economic snap backs. The post-Panic of 2008 has failed to follow this typical “V-shaped” economic recovery pattern. After almost two years, the U.S. economy remains mired in an anemic recovery, with a current 2.4% year-over-year rate of growth. This paltry growth rate doesn’t even reach the U.S.’s long-term…
-
The Great Reflation
“The financial crisis, the speculative bubble leading up to it, and the aftermath have proven once again just how true the old saying is that if you want to know what’s going on in the financial system, watch the banks. The banking system has always been the centerpiece of liquidity flows, and financial markets are…
-
The Experience of Free Banking
“There was controversy over how much power the central bank should have and what it should try to do, but no respectable economist suggested that central banking itself was unnecessary or harmful until Hayek finally despaired of it in 1976 and began to argue that the only way to achieve monetary stability was to denationalize…
-
“Illinois Free Banking Experience”
“Recent studies by Rolnick and Weber (1983, 1984) have presented evidence challenging the conventional view of the Free Banking Era (1837-1863). The conventional view depicts a period of financial chaos in which lenient regulations gave rise to a plethora of banks, bank notes and coun-terfeit bank notes, unscrupulous “wildcat” bankers, and large noteholder losses. Rolnick…
-
“New Evidence on the Free Banking Era”
“The United States has experienced many periods of major banking panics during which a large number of banks have failed and financial markets have been in considerable disarray. The period consid-ered by many as the worst is the one period when banks were more or less left alone to pursue their own profit-motivated interests, the…
-
“Free Banking and Information Asymmetry”
“A traditional argument against free banking is that it will collapse because of information externalities: it is impossible for depositors to tell whether a high deposit rate offered by a bank is due to its high efficiency or risky lending strategy. This paper shows that in a separating equilibrium a higher-quality bank offers a lower…
-
“Free Banking and Monetary Control”
“Were free banking to reemerge today, it would probably be based, not on a gold standard, but on irredeemable paper (‘fiat’) base money issued by a former or extant central bank. Under this form of free banking, the price level is no longer given, and conventional monetary policy questions remain relevant. In particular, would free…
-
“The Gold Standard: A Principled Case”
“In recent months, we have witnessed fierce arguments between, on the one side, those who defend the current system of “fiat money,” in which, as John Maynard Keynes stated, money “is created and issued by the State, but is not convertible by law into anything other than itself, and has no fixed value in terms…
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