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The limits of monetary policy, part 1
On Thursday, Philadelphia Federal Reserve President Charles Plosser gave a speech on Thursday called “A Limited Central Bank” that I highly recommend. The underlying theme of Plosser’s speech was that central banks should have a limited…
Banks piling into auto loans as demand picks up
Given the relatively low default rates in auto loans, banks' credit departments have loosened lending requirements.
European cohesion, austerity, Grexit, and eurozone expulsion
With Ireland and Spain poised to leave Europe’s bailout mechanism, Europe appears to have weathered a very big storm. Yet, the Eurozone is still wracked with joblessness and economic growth remains elusive. What’s more, Europe’s…
Five facts about energy sources you should know
We've had a number of questions on energy sources in the United States - particularly with respect to the generation of electricity. Here are a few interesting facts about recent trends that hopefully help clarify some of the confusion…
Forward guidance, time inconsistency, and monetary policy
Over the past few months, the world’s central banks have turned to forward guidance as a central focus of monetary policy. This tool is untested as a central component of monetary policy and has been thrust into the spotlight only because…
The deflationary forward guidance threshold
In September I wrote that I expected the Fed to establish a lower bound for inflation threshold as one of its next moves. The rationale was two-fold. First, inflation is undershooting and the Fed needs policy space to deal with unwanted…