Tag: Federal Reserve

The Fed’s New Foray Into Crony Capitalism »

I’ve been teaching economics for decades, and until 2008 I taught my students that the Federal Reserve Bank (Fed) engages in monetary policy through open market operations by buying and selling government securities. (They have other policy tools too.) They dealt in government securities partly because their operations would alter the money supply without…
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Boom and Bust Banking—Causes and Cures »

The twenty-first century opened with optimism, as first the technology sector and then the housing sector boomed. But then came the financial crisis and the Great Recession—the worst economic malaise since the 1930s. Why, after several decades of economic stability, did the business cycle return with such force? Most attempts to answer this question…
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The Fading Promise of the Euro »

When the euro was created in 1999 the new currency promised to facilitate trade within the euro zone, to further unify Europe, and to challenge the dollar as the world’s reserve currency. The common currency does facilitate trade, but the differing goals of the member countries seem to be creating more divisiveness than unity…
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What’s a Geezer to Do? »

In 1968, I went to work as a faculty member at the University of Washington. Two years later, I noticed that a large deduction had been made to my monthly pay, and I inquired about it. I discovered that it was my personal contribution to a retirement plan. Because I had no recollection of…
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Anna Jacobson Schwartz (November 11, 1915–June 21, 2012) »

Anna Schwartz was one of the best economic historians of the past century. With Milton Friedman, she wrote (among many other works) that century’s most influential economic history book, A Monetary History of the United States, 1867-1960 (1963). Although not an economic theorist of Friedman’s caliber, she was a fine economist in her own…
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Krugman’s Mythology of U.S. Banking History »

Do the banking panics of the late 19th century prove that a safe and sound financial system requires government oversight of banks? Paul Krugman (and most every pundit) seems to think so. In his New York Times column of May 13, he writes: “Current right-wing mythology has it that bad banking is always the…
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Economists Testify on Federal Reserve Before House Committee Chaired by Ron Paul »

On May 8th, five economists, including our Research Fellow Peter Klein, appeared in testimony before the U.S. House Committee on Financial Services Domestic Monetary Policy and Technology Subcommittee, chaired by Congressman Ron Paul. The panelists included two economists from the Austrian School, two Keynesians, and one monetarist: Peter G. Klein, Research Fellow, The Independent…
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Inflation Update »

Conventional wisdom today is that the threat of inflation is low, despite the Fed’s easy money policy, and notwithstanding some economists in the minority (I’m in that minority) who see the Fed’s easy money policy as laying the groundwork for inflation. The March Consumer Price Index (CPI) numbers were recently released, so let’s see…
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The Independent Review—Spring Issue Now Available »

We are delighted to announce the publication of the Spring 2012 issue of the Independent Institute’s peer-reviewed journal, The Independent Review. This issue’s articles and book reviews deal with the following questions: What does evidence from hunter-gatherer societies suggest about whether human beings are better adapted for individualism or collectivism? Read the article. What…
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Likely Fiscal and Monetary Legacies of the Current Crisis »

I am not a prophet, nor do I play one on TV. Nevertheless, I will hazard some conjectures here about certain likely legacies of the current crisis. I focus on fiscal and monetary matters. In a future post, I will deal with regulatory and ideological matters. I will try to avoid mere guesses or hunches…
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