Financial Markets

Why would an investor buy a bond that pays a negative interest rate? The answer lies in understanding how central banks manipulate the economy.

Why would an investor buy a bond that pays a negative interest rate? The answer lies in understanding how central banks manipulate the economy.

Prices of consumer goods have grown rather slowly in spite of sizable money supply growth. Why is there a gap?

In this crisis the money supply has already increased far more than during the last crisis. But it's hard to say when this will produce inflation because we're still in the midst of a demand shock and a collapse in oil prices.

Prices of consumer goods have grown rather slowly in spite of sizable money supply growth. Why is there a gap?

In this crisis the money supply has already increased far more than during the last crisis. But it's hard to say when this will produce inflation because we're still in the midst of a demand shock and a collapse in oil prices.

Many argue that unregulated markets would fail due to lack of consumer knowledge, or information asymmetry. But competition in free markets actually gives rise to all kinds of mechanisms that help consumers make informed decisions. This is as true of medical tests for any other good.

The COVID-19 panic may have sped up the beginning of this economic crisis, but the virus wasn’t the cause. The real cause of the crisis was the boom that came before it.