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Browsing Tag
Economics
U.K. central bank does not follow Fed to ZIRP
The U.S. Dollar got more bad news today when the Bank of England (BoE) decided to not follow the U.S. Federal Reserve's lead to a Zero Interest Rate Policy (ZIRP). The BoE was seen as the most likely to follow in the Fed's footsteps as i…
Connecting Fed cuts with credit writedowns and quantitative easing
To my mind, lowering interest rates in the aftermath of an enormous credit bubble where institutions have just destroyed $1 trillion in capital is wrong. It distorts lending decisions such that yet more money will eventually be lent out…
A brief philosophical argument about the role of government, stimulus and recession
I was chatting with Marshall Auerback about some of my recent posts on Keynesianism and Austrian Economics -- Marshall is a Keynesian -- and he convinced me that my posts were somewhat misleading and that I had only presented half of the…
Nouriel Roubini: Will massive stimulus ward off stag-deflation?
I am certainly of the view that a considerable worsening of the recession is baked in the cake for 2009. But will fiscal and monetary stimulus prevent worst case scenarios? I certainly hope so, as I have laid out in recent posts.
But,…
What does Mises say about trying to stimulate the economy out of recession
Recently I wrote a post which claimed that Keynesian stimulus is what we need in the global economy right now. These ideas are considered heresy in Austrian School circles because trying to stimulate the economy out of recession only puts…
Quote of the day: William White and inflation
Caroline Baum had a good column today at Bloomberg in which she suggests central banks consider asset prices in monetary policy going forward. In the piece she quoted William White, a former economist from the Bank for International…
Quantitative easing everywhere?
First the Fed and now the ECB and Bank of England are talking about some form of quantitative easing! Of course, if they are all going to do it, do we have a dollar crash or is it more of a crisis of confidence in fiat currencies in…
Chart of the day: Excess Reserves
One feature that is peculiar to the present downturn is the accumulation of reserves at the U.S. Federal Reserve. I imagine it is no different at other central banks, though I have not seen the data. Let me tell you what this reserve…
Roubini: How to avoid the horrors of ‘stag-deflation’
The US and the global economy are at risk of a severe stag-deflation, a deadly combination of economic stagnation/recession and deflation. Only very aggressive and co-ordinated policy actions will ensure the global economy recovers in 2010…