The illusion of the Keynesian multiplier
For most economists and financial commentators the heart of economic growth is the increase in the demand for goods and services. It is…
Who determines interest rates?
For most experts the central bank determines short- term interest rates by setting the target to the benchmark policy rate such as the…
Making sense of correlations in economics
Often we observe that two pieces of data, which are not supposed to have any relationship, appear to have very high visual correlation….
Statistics and the facts of economic reality
The government’s releases of various economic indicators such as GDP, CPI and unemployment receive wide coverage in the media. In a measured and…
Is deflation about general decline in prices?
For most experts deflation is bad news since it generates expectations for a decline in prices. Because of this it is held, consumers…
The balance of payments myth
In March, the US trade account balance stood at a deficit of $50 billion against a deficit of $49.28 billion in February and a…
Should the Fed tamper with the quantity of money?
Most economists are of the view that a growing economy requires a growing money stock, because economic growth gives rise to a greater…
The essence of goods prices determination
Why do individuals pay much higher prices for some goods versus other goods? The common reply to this is the law of supply…
Economic stability and economic growth
During the period 1920 to 1960, we can observe that the annual growth rate of production was more volatile than between the…
Subsistence fund the heart of economic growth
What characterizes the modern economy is its complex structure of production that seemingly generates an endless amount and a variety of goods. It…