Jul 10, 2014
Inflation targeting emerged in the early 1990s and soon became the dominant monetary-policy regime. It provided a much-needed nominal anchor that had been missing since the collapse of the Bretton Woods system.
Oct 24, 2013
This paper analyzes the characteristics of banks that received emergency loans from the Federal
Reserve during the recent financial crisis. Using unique data consisting of emergency loan
transactions, I provide evidence that larger banks, in terms of assets and market capitalization,
were more likely to receive emergency support.
Sep 17, 2013
Cryptocurrencies are digital alternatives to traditional government-issued paper monies. Given
the current state of technology and skepticism regarding the future purchasing power of
existing monies, why have cryptocurrencies failed to gain widespread acceptance?
Sep 11, 2013
Many observers have been perplexed
by the slow recovery from
the 2008 recession. In the United
States, Congress passed a nearly
$800 billion stimulus in early 2009,
yet growth remained sluggish. More recently, a shift
toward fiscal austerity does not seem to have noticeably
slowed the rate of economic growth.1 This seems
to go against the textbook Keynesian model, which
says fiscal stimulus has a multiplier effect on GDP;
however, we shouldn’t be surprised that fiscal policy
seems less effective than anticipated. As we’ll see, fiscal
policy ineffectiveness is one byproduct of modern
central banking, with its focus on inflation targeting.
Aug 19, 2013
As the world’s first decentralized digital currency, Bitcoin has the potential to revolutionize online payments systems in a way that benefits individuals and businesses. Instead of using an intermediary such as PayPal or submitting credit card information to a third party for verification—both of which often include transaction fees and other restrictions—Bitcoin allows individuals to pay each other directly for goods or services.
Jul 24, 2013
Central banks have recently done a dreadful job of stabilizing the path of nominal
expenditures. The adverse demand shock of 2008–9 led to a severe recession
in the United States and Europe. Monetary policy could be greatly improved with
a regime of “targeting the forecast,” or setting policy so that the expected growth
in nominal GDP is equal to the central bank’s target growth rate. This goal could
be accomplished by setting up a nominal GDP futures market and then adjusting
the monetary base to stabilize nominal GDP futures prices. The market, not central
banks, would set the level of the monetary base and short-term interest rates under
this sort of policy regime. Modest adjustments in such a regime could address many
previous criticisms of futures targeting.