money

I have been saying for years now that the money multiplier does not adequately explain how money is created in a modern fiat money economy. In particular, the idea that banks are passive intermediaries who simply respond to injections of…

By Frances Coppola Scott Sumner argues that when the monetary base is fixed, low interest rates are deflationary. I've emphasised the fixed monetary base because it is an important condition. If the monetary base is NOT fixed then the…

Andrea Terzi Dr. Terzi is a Professor of Economics at Franklin University Switzerland and a Research Associate with the Levy Economics Institute of Bard College. One thing’s for sure: The financial crisis has dealt a deadly blow to what…

I’m doffing my cap to the researchers at Threadneedle Street for a new paper “Money creation in the modern economy,” which gives a truly realistic explanation of how money is created, why this really matters, and why virtually everything…

Recent economic and geopolitical events should be seen through a longer-term strategic lens. During the Cold War, we lived in a bipolar world dominated by the US and its Allies on one side and the Soviets and their vassal states on the…

Here are some brief thoughts on the monetary system’s role in repeated economic crisis in the last 40 years.

Abenomics is one of the most aggressive economic experiments we have witnessed in the post-Marshall Plan developed world. The questions is whether the massive stimulus campaign can work when politically there will always be discomfort with…

2013 has been a breakout year for Bitcoin, the virtual payment system. I haven’t written anything on it to date but I have been following the market. Here are some ideas on Bitcoin based on what I have seen.

So much has been written about the endogeneity of money that I thought it was now widely accepted. But recent exchanges have shown me that people STILL aren't getting it. Most recently, there have been two themes doing the rounds that…

Bank Indonesia has fallen far behind the curve in its currency management tactics. After fairly steady intervention kept USD/IDR trading near the 10,000 area from May through early August, the authorities have been allowing the pair to move…