The Fed and asset bubbles
According to the Financial Times from October 18th 2020, senior Federal Reserve officials are calling for tougher financial regulation to prevent the US central…
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Can constant money growth rule prevent boom-bust cycles?
According to the Nobel Laureate in Economics, Milton Friedman, the key cause of the business cycles is the fluctuations in the growth rate of…
Read MoreWhy inflation is not about general increases in prices
For most commentators, inflation is about general increases in the prices of goods and services. From this, it is established that anything that contributes…
Read MoreIs demand independent of production?
Following the ideas of John Maynard Keynes and Milton Friedman, many commentators associate economic growth with increases in the demand for goods and services….
Read MoreIs diversification the heart of investment?
According to the Modern Portfolio Theory (MPT), financial asset prices always fully reflect all available and relevant information, and that any adjustment to…
Read MoreKeynesian ideas can only make things worse
In the New York Times on September 8, 2020, Paul Krugman suggested that “The CARES Act, enacted in March, gave the unemployed an extra…
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Why trade balance is not the essence of currency exchange rate determination
In July this year the US trade balance stood at a deficit of $63.6 billion against a deficit of $51 billion in July…
Read MoreIs laboratory in economics possible?
In the natural sciences, a laboratory experiment can isolate various elements and their movements. There is no equivalent in the discipline of economics….
Read MoreCut in government outlays is the true tax cut
We suggest that projects that government undertakes can be classified as wealth squandering. The fact that the private sector does not undertake these projects…
Read MoreWhy the policy of price stability leads to more instability
One of the duties that a central bank is expected to fulfill is to keep the general level of prices in the economy stable….
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