How fractional reserve banking contributes to increases in money supply
Some commentators consider fractional reserve banking as a major vehicle for the expansion in the money supply growth rate. What is the nature…
Read MoreAustrian School
Can boom-bust cycles emerge in a free market economy where gold is money?
Following the Austrian Business Cycle Theory (ABCT), the boom-bust cycle emerges in response to a deviation in the market interest rate from the…
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The shape of the yield curve and the state of the economy
On Wednesday August 14 2019, participants in financial markets were shocked by the news that the differential between the yield on the 10-year…
Read MoreDeeply negative nominal rates are on their way
Growing evidence of a severe global recession is sure to provoke more aggressive monetary policies from central banks. They had hoped to have the…
Read MoreDoes the GDP growth have anything to do with true economic growth?
To gain insight into the state of an economy, most financial experts and commentators rely on a statistic called the Gross Domestic Product…
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Obvious Capital Consumption
We have spilled many electrons on the topic of capital consumption. Still, this is a very abstract topic and we think many people still struggle…
Read MoreDoes the idea of price stability make sense ?
The idea of price stability originates from the view that volatile changes in the price level prevent individuals from clearly seeing market signals…
Read MoreFed chairman and the Phillips curve
On July 11, 2019 before the Senate Banking Committee, the Federal Reserve Board Chairman Jerome Powell said that the relationship between unemployment and…
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Is low inflation a threat to the US economy?
“When interest rates are low central banks don’t have much room to maneuver to deal with a crisis”, The New York Fed President…
Read MoreCan expectations undo the validity of the Mises’s business cycle theory?
According to Ludwig von Mises’s Austrian Business Cycle Theory (ABCT), the artificial lowering of interest rates by the central bank leads to a…
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