The original justification for the creation of another central bank did not allude to the modern goals of “full employment” and “price stability.” Rather, the pleas of the time called for an “elastic currency” that would expand or contract according to the “needs of trade.”
The original justification for the creation of another central bank did not allude to the modern goals of “full employment” and “price stability.” Rather, the pleas of the time called for an “elastic currency” that would expand or contract according to the “needs of trade.”
The Understanding Money Mechanics series by Robert P. Murphy, is a comprehensive overview of the theory, history, and practice of money and banking, with a focus on the United States.
Dr. Bob Murphy introduces an upcoming e-book on the mechanics of the Fed.
Mr. Volcker certainly deserves credit for curbing the Great Inflation of the 1970s. However, he also merits a lion’s share of the blame for unleashing the Great Inflation on the US and the world economy in the first place.
Central bankers are increasingly talking about raising the inflation target above 2 percent. Are negative interest rates next?
Why does this domino process affect only banks, and not real estate, publishing, oil, or any other industry that may get into trouble?
The true lesson from Japan is that central planners prefer to gradually nationalize the economy before even considering a moderate reduction in government size and control.
Suppose that a convincing orator should go on TV tomorrow, and urge the public: "The banking system of this country is insolvent."
The Fed overestimated the robustness of the economy, underestimated the level of addiction of the markets to cheap money, and it was way too quick to proclaim a “full recovery” from the crisis.
