Tag Archives: inflation targeting

What is it about money?

I was going to hold off blogging until the New Year, but irritation drove me to posting … In a recent article, Alan Kohler had this to say: The real war is between monetary policy and the Digital Revolution – between the world of finance trying to reduce the value of money and therefore debt, […]

Money, prices, assets and evasions of responsibility

Understanding the equation of exchange can help see what a massive evasion of institutional responsibility lies behind the Great Recession and the Eurozone crisis. Economist Irving Fisher developed the original algebraic formulation of the equation of exchange, in his The Purchasing Power of Money (1911): MV = PT Money x Velocity = Prices x Transactions. Fisher’s use of […]

Human societies as studies in relative scarcity: the price of children, the cost of capital

That modernising societies experience a “demographic transition“–a change from high fertility and high death rates to low fertility and low death rates with an intermediate period of high fertility and low death rates–is well known. The likely reason is lags in adjusting to changes in death rates. The price of children Having children is a […]

Check your expectations (3) Milton Friedman not going far enough

Milton Friedman’s 1967 Presidential Address (pdf) is something monetary economists regularly say anyone interested in monetary economics should read. Having recently read it, I have come to the conclusion that it is something anyone interested in monetary economics should read. As is normal with Friedman, it is beautifully clear, one his great attributes. His analysis holds […]

Time enough for success

Skepticlawyer’s excellent post on the GFC examines the financial crisis. The post below is concerned with the time period for monetary policy. While, as I note below, the collapse in total spending clearly worsened the GFC, this post is more about how to avoid or minimise recessions and, particularly, events such as the Great Recession. […]