Since the fall of 2008, the Federal Reserve System has pumped an almost incomprehensibly large amount of reserves into the commercial banking system—about $1.4 trillion. In normal circumstances, this action would have given rise to hyperinflation. Of course, not only has no hyperinflation occurred, but scarcely any inflation at all has occurred, and policy...
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Years ago, Kenneth Arrow, an economist who was joint winner of the Nobel Memorial Prize in Economics in 1972, argued that Pareto optimality (a situation in which everyone is as well off as he can possibly be from his own point of view—given the constraints of the system) is a good thing. Unless you...
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