Monetary System

The Fed could do a number of things: rate easing, municipal easing, inflation targeting, nominal GDP targeting. It is just that “the forward-looking cost-benefit analysis has shifted away from the potential benefits and towards greater…

I do not take the position that other writers on this blog do that Social Security and Medicare must be protected at all costs. In fact, as you can see above, I outlined very clearly two years ago what is happening politically right now.…

This post explains both the wellspring and the significance of currency sovereignty, something that Eurozone countries gave up to join the single currency.

For ideological reasons, one might believe that limiting or reducing government is better. However, it does not follow that doing so is a painless exercise.

The economy is complex in the extreme. And what economists tend to do is model it by making a few simplifying and clarifying assumptions. Here’s the problem.

Hoenig, like many Fed leaders from the Reserve banks outside of Washington and the money centers in New York, Boston and San Francisco, is more comfortable with safe and boring banking than the higher risk model that brought the global…

This blurb from Paul Krugman and Robin Wells' review of Jeff Madrick's book on the credit crisis sums up why the busts keep getting bigger

When we tighten our belts, it means that we are trying to build up our savings. We do this by spending less. But spending drives our economy. Sales create jobs. So unless Obama has a secret plan to reverse three decades of current account…

Here is a bit more detail courtesy of Fitch, the ratings agency, outlining exposure to the European Periphery.

The road map for how a Danish government might be forced to issue government bonds and swap them for unsalable covered bonds in order to allow its financial institutions to abide by the Basel rules is an almost sinister way in which the…