Why Not Every Credit Expansion is Good for Economic Growth
In their various statements, central bank policy makers have said that the key to economic growth is a smooth flow of credit. For them,…
The meaning of the neutral interest rate
The idea of a neutral interest rate emanates from the writings of the Swedish economist Knut Wicksell. According to Wicksell, There is a certain…
Is there a place for experimental economics?
Economists have always been envious of the practitioners of the natural and exact sciences. They have thought that introducing the methods of natural sciences…
Money supply versus money demand
According to popular thinking, not every increase in the supply of money will have an effect on the production of goods. For instance, if…
Do the Fed Chairman’s comments on the economy make any sense?
In his speech at the National Press Club, Washington, DC on February 3, 2011 the Federal Reserve Board Chairman Ben Bernanke repeated that the…
Can expectations neutralise the side effects of loose monetary policy?
According to the Austrian Business Cycle Theory (ABCT), the artificial lowering of interest rates by the central bank leads to a misallocation of resources…
Is Velocity Like Magic?
It is alleged that when the velocity of money rises, all other thing being equal, the buying power of money declines ie the prices…
Has the US economy entered a self-sustaining growth path?
Recent strengthening in some key US economic data has prompted many economic commentators to suggest that the US economy may have entered upon a…
Currency devaluation and economic growth
According to popular thinking the key to economic growth is demand for goods and services. It is held that increases or decreases in demand…
Inflationary expectations and economic growth
In its September 21 meeting Fed officials expressed concern that the US rate of inflation is far too low. Also, on Friday the Fed…