Can gradual interest rate tightening prevent shocks?
Fed policy makers are of the view that if there is the need to tighten the interest rate stance the tightening should be gradual…
What should be the criteria for model selection?
In order to make the data “talk,” economists utilize a range of statistical methods that vary from highly complex models to a simple display…
Fed confused about what drives inflation
On October 4 2017, the former governor of the Federal Reserve Daniel Tarullo in a speech at the Brookings think-tank in Washington said Fed…
Lowering of tax rates without lowering government outlays cannot grow the US economy
The US President, Donald Trump, proposed on Wednesday October 27 2017 a tax plan that would lower the top individual tax rate to 35%…
Why US price inflation remains relatively subdued?
The yearly growth rate of the US consumer price index stood at 1.9% in August against 1.7% in July, while the growth rate of…
Does the central bank determine interest rates?
According to mainstream thinking, the central bank is the key factor in determining interest rates. By setting short-term interest rates, the central bank, it…
Money multiplier is really about credit out of “thin air”
According to traditional economics textbooks, the current monetary system amplifies the initial monetary injections of money. The popular story goes as follows: if the…
Liquidity trap – what is it all about?
Some economists such as Nobel Laureate Paul Krugman are of the view that if the US were to fall into liquidity trap the US…
Should bank regulation be relaxed?
Leading Federal Reserve policymaker Stanley Fischer has hit out at plans to unwind banking regulation, calling it a “terrible mistake.” President Donald Trump and…
Assessing the long-term structural risk for China
After falling to 6.4% in Q1 2009 the yearly growth rate of China’s real GDP climbed to 12.2% by Q1 2010. Afterwards the yearly…