gave the world a textual disaster. The FOMC continues to point towards rate hikes starting in mid-2015. Although there have been worries in markets that we are headed towards a repeat of 1998, the FOMC is unlikely to buy into those theories (possibly until it is too late).
Wednesday, December 17, 2014
Monday, December 15, 2014
Saturday, December 13, 2014
Although they are now thin on the ground within academia, 'Austrian' economists are ubiquitous in the financial markets and across the internet. (They are called Austrian because many of the founders of the school of thought were originally from that country.) Since Austrian economics is a fairly pure 'free markets' doctrine, it is politically attractive to many in finance, which partially explains its appeal. But the question is whether it offers any insights that give an 'edge' to analysts? I recently read "Paper Money Collapse: The Folly of Elastic Money" by Detlev Schlichter, and I am somewhat unconvinced about the amount of insights that are on offer.
Wednesday, December 10, 2014
In case that made sense to you, I just wanted to let you know that Luca Pezzotta translated my Moody's article into Italian.
Sunday, December 7, 2014
Wednesday, December 3, 2014
Saturday, November 29, 2014
In "Inflation hurts; so why not deflation?" Rodger Malcolm Mitchell asks why policymakers target a low rate of inflation instead of deflation. This question is often asked by others, such as Austrian economists who argue that we should have a gold-backed currency that would be expected to lock countries in a mild deflation. I offer reasons why the current policy is reasonable. although I recognise that there is a cost to the erosion of the purchasing power of monetary tokens over time.