All Posts Tagged With: "money supply"

A Simple Solution

There is always an easy solution to every human problem – neat, plausible, and wrong. —H. L. Mencken I have devised a simple plan for improving Americans’ health by drastically reducing everyone’s weight, thereby significantly increasing longevity and reducing medical costs. All we need to do is revalue the pound. Instead of a pound being [...]

24Aug2011 | Richard W. Fulmer | 1 comment | Continued

What’s Up with Inflation?

Inflation as measured by the Consumer Price Index (CPI) has been almost nonexistent for several years, though it started creeping higher in the first half of 2011. Yet many prices have been rising at double-digit percentage rates. Are official figures trustworthy? And what of expectations? There is a great deal of buzz right now about inflation [...]

22Jun2011 | Warren C. Gibson | 14 comments | Continued

Quantitative Uneasiness

In their recent paper, “Has the Fed Been a Failure?,” George A. Selgin, William D. Lastrapes, and Lawrence H. White conclude that over nearly 100 years the Federal Reserve’s performance has been mostly awful. Unfortunately, the Fed is currently engaged in a policy that will likely make a nice addition to their article. This policy, [...]

21Apr2011 | Ivan Pongracic Jr. | 36 comments | Continued

Central Banking Beats Free Banking?

In “More Bits on Whether We Need a Fed,” a November 21 Marginal Revolution blog post, George Mason University economics professor Tyler Cowen questions “why free banking would offer an advantage over post-WWII central banking (combined with FDIC and paper money).” He adds, “That’s long been the weak spot of the anti-Fed case.” Free banking [...]

23Mar2011 | Fred E. Foldvary | 3 comments | Continued

“F” as in Fed

The Federal Reserve, America’s fatally conceited monetary central planner, is not terribly popular these days—which is cause for hope—and now we have a report card on the entire Fed era that strongly supports the view that we’d be better off without it. At the very least, as the authors suggest, the burden of proof is [...]

24Feb2011 | Sheldon Richman | 1 comment | Continued

Government’s Diminishing Benefits from Inflation

For millennia governments have resorted to expanding the money stock, either through coinage debasement or fiat money, to finance their expenditures. This expedient, with its resulting price inflation, has occurred most noticeably during wars. And the Zimbabwe hyperinflation of 2007–08, the second worst in world history, peaking at a rate of 79.6 billion percent per [...]

22Oct2010 | Jeffrey Rogers Hummel | 6 comments | Continued

Deflation: The Good, the Bad, and the Ugly

During the current recession a number of commentators have made various comparisons to the Great Depression, mostly because of the dramatic decline in the stock market and ongoing troubles in the financial industry. When oil prices also began a dramatic decline in the autumn of 2008, pulling the overall consumer price level downward for the [...]

5Jan2010 | Steven Horwitz | 59 comments | Continued

The Depression You’ve Never Heard Of: 1920-1921

When it comes to diagnosing the causes of the Great Depression and prescribing cures for our present recession, the pundits and economists from the biggest schools typically argue about two different types of intervention. Big-government Keynesians, such as Paul Krugman, argue for massive fiscal stimulus—that is, huge budget deficits—to fill the gap in aggregate demand. [...]

18Nov2009 | Robert P. Murphy | 73 comments | Continued

Financial 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 | Continued

How Rapidly Should the Money Supply Grow?

I would like to make one correction to Howard Baetjer’s article “Inflation 101” (September). The author suggests that inflation results when the money supply expands faster than the rate at which goods and services are produced. The author correctly points out that this expansion of the money supply will lead to rising prices. But inflation [...]

22Jan2009 | Mike Van Winkle | 0 comments | Continued

On the Austrian Theory of the Trade Cycle, Part I

One of the most vivid memories of my undergraduate years is of sitting for hours in my carrel in the old Polk Library at Nicholls State University and reading F.A. Hayek’s Monetary Theory and the Trade Cycle and his Prices and Production. These books on the economic cycles of booms and busts are among the [...]

20Jan2009 | Donald J. Boudreaux | 5 comments | Continued

Money Supply Watch

I’m not a trained economist. But shouldn’t this worry us? This chart tracks M1 data over the last year. M1, according to Wikipedia, is “currency in circulation + checkable deposits (checking deposits, officially called demand deposits, and other deposits that work like checking deposits) + traveler’s checks.” This is a primary measure of money supply. [...]

9Jan2009 | Mike Van Winkle | 0 comments | Continued

The Recurring Crisis

Recently the governor of the Bank of England announced that the “nice” times had come to an end. (In the Bank’s lexicon, NICE = “Non-Inflationary Constant Expansion”). This news will not come as any shock to the many Americans who have had their homes repossessed recently, but it does appear to have startled many of [...]

1Jul2008 | Stephen Davies | 0 comments | Continued

Capital Letters

Thanks to Milton Friedman’s brilliance, charisma, and diplomacy he became an ardent spokesman for many free-market reforms in this country. And now Ivan Pongracic, Jr. (“The Great Depression According to Milton Friedman,” September 2007) gives him credit for accomplishing what seems miraculous—convincing Fed officials that the Fed itself was responsible for precipitating the crash and [...]

1Dec2007 | FEE Admin | 0 comments | Continued

The Great Depression According to Milton Friedman

The author extends special thanks to Lawrence H. White and Ivan Pongracic, Sr., for their helpful comments. Few events in U.S. history can rival the Great Depression for its impact. The period from 1929 to 1941 saw fundamental changes in the landscape of American politics and economics, including such monumental events as America ‘s going [...]

1Sep2007 | Ivan Pongracic Jr. | 77 comments | Continued

Something Besides Money Growth Causes Inflation?

Howard Baetjer, Jr., is a lecturer in economics at Towson University. Some economic phenomena can result from a variety of causes. A temporary increase in unemployment, for example, might be caused by a sudden, disruptive change in production technology, or in trade patterns, or in labor or tax laws; or it could be caused by [...]

1Jul2007 | Howard Baetjer Jr. | 7 comments | Continued

The Fed’s Potent Power

The Federal Reserve holds the fate of the U.S. economy in its hands. Or that’s the conclusion many observers draw when they watch investors react wildly to the most minute details of the Fed’s policy statements. This conclusion is at once exaggerated and accurate. It’s exaggerated because, at bottom, the Fed controls only the supply [...]

1Jan2007 | Donald J. Boudreaux | 1 comment | Continued
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