All Posts Tagged With: "monetary theory"
Federal Reserve to Leave Interest Rates Near Zero
“The Federal Reserve said Wednesday that it will shut down some of the emergency triage measures it put in place at the height of the financial crisis but will leave interest rates near zero out of continuing concern about the weak U.S. economy.” Never underestimate government’s willingness to delay the inevitable. FEE Timely Classic: “Economics [...]
17Dec2009 | Mike Van Winkle | 0 comments | ContinuedFinancial Crises and the Federal Reserve’s Punch Bowl
Why did the U.S. financial system nearly collapse last year? People blame Wall Street’s excessive greed and risk-taking. But without easy money, the massive risk-taking could not have happened. To be sure, financial firms leveraged up—that is, they did a lot of business with borrowed money. That juiced up revenues and bonuses in the boom—and [...]
18Nov2009 | Chidem Kurdas | 12 comments | ContinuedHow Much Money Does an Economy Need?
In How Much Money Does an Economy Need? Hunter Lewis addresses some of the most fundamental questions of monetary policy in a question-and-answer format. For a subject often clouded by technicalities, the language is refreshingly plain. Sometimes too plain, perhaps, to satisfy an academic economist. But academic economists aren’t the intended audience. The book can [...]
15Oct2009 | Lawrence H. White | 1 comment | ContinuedDo We Need Deposit Insurance?
f banks can suspend convertibility, depositors know that runs merely precipitate suspension. This greatly reduces depositor incentive to panic and run. Allowing banks the right to suspend would probably not eliminate all runs, but it would plausibly limit them to banks that are insolvent rather than merely illiquid.
The question, then, is whether a banking system with less regulation—no prohibition on suspension and no deposit insurance—might work better than current regulation—prohibitions on suspension, combined with deposit insurance and balance-sheet regulation.
The evidence from the pre-1914 era suggests that the regime with less regulation has promise. Banks were not legally allowed to suspend convertibility during this era, but many did so anyway, sometimes with explicit approval of, or even encouragement from, regulators. This did not eliminate runs and panics, but the record suggests that suspension reduced contagion and failure in these episodes.
24Apr2009 | Jeffrey Miron | 4 comments | ContinuedA Crisis of Political Economy
The current state and the current banking sector require each other. They are so reciprocally intertwined that each is an extension of the other.
Remember this the next time somebody tells you, as New York Times columnist Bob Herbert did, that “free market madmen” caused the current financial crisis that is threatening to undermine the global economy. There is no free market. There is no “laissez-faire capitalism.” The government has been deeply involved in setting the parameters for market relations for eons; in fact, genuine “laissez-faire capitalism” has never existed. Yes, trade may have been less regulated in the nineteenth century, but not even the so-called Gilded Age featured “unfettered” markets.
24Apr2009 | Chris Matthew Sciabarra | 6 comments | ContinuedBook Reviews – October 2008
Mises: The Last Knight of Liberalism by Jörg Guido Hülsmann Ludwig von Mises Institute • 2007 • 1143 pages • $50.00 Reviewed by Bettina Bien Greaves Biographer Guido Hülsmann has written a magnificent book, describing in detail not only the life of Ludwig von Mises, but also his writings, his intellectual development, and his importance. [...]
1Oct2008 | George C. Leef | 1 comment | ContinuedMilton Friedman (1912-2006)
Milton Friedman, who died last month at age 94, was one of the twentieth century’s most influential champions of individual liberty and free markets. The 1976 winner of the Nobel Prize in economics and an early associate of FEE, Friedman did more than any single person in our time to teach the public the merits [...]
1Dec2006 | and Richard M. Ebeling | 4 comments | ContinuedHenry Hazlitt and the Failure of Keynesian Economics
For four decades, from the mid-1930s to the 1970s, Keynesian economics almost monopolized economic policy in the United States and around the world. The “new economics,” as it was called, was going to assure mankind economic stability, full employment, and material prosperity—all through wise government management of monetary and fiscal policy. So dominant was this [...]
1Nov2004 | Richard M. Ebeling | 38 comments | ContinuedBook Reviews – September 2004
The Company of Strangers: A Natural History of Economic Life by Paul Seabright Princeton University Press • 2004 • 304 pages • $29.95 Reviewed by Richard M. Ebeling One of the most profound insights of economics is that the activities of billions of people can be coordinated without central direction and without most of these [...]
1Sep2004 | FEE Admin | 0 comments | ContinuedKnut Wicksell: A Sesquicentennial Appreciation
Richard Ebeling is the Ludwig von Mises Professor of Economics and chairman of the economics department at Hillsdale College. In the early months of 1889 a 37-year-old Swedish student named Knut Wicksell was walking through the streets of Berlin in Germany when he happened to notice in the window of a bookstore a recently published [...]
1Dec2001 | Richard M. Ebeling | 1 comment | ContinuedGottfried Haberler: A Centenary Appreciation
During the first week of July in 1936, an international conference on the “Problems of Economic Change” was held in Annecy, France. It brought together such notable economists as Ludwig von Mises, Wilhelm Röpke, Oskar Morgenstern, Bertil Ohlin, Lionel Robbins, Dennis Robertson, Charles Rist, William Rappard, John B. Condliffe, John Van Sickle, Alvin Hansen, John [...]
1Jul2000 | Richard M. Ebeling | 3 comments | ContinuedMoney and Gold in the 1920s and 1930s: An Austrian View
Joseph Salerno is a professor of economics in the Lubin School of Business at Pace University. In consecutive issues of The Freeman, Richard Timberlake has contributed an interesting trilogy of articles advancing a monetarist critique of the conduct of U.S. monetary policy during the 1920s and 1930s.[1] In the first of these articles, Timberlake disputes [...]
1Oct1999 | Joseph T. Salerno | 7 comments | Continued-
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