Easy Money, Slow Growth

by Jerry O’Driscoll In today’s Wall Street Journal, John Taylor explains why the U.S. recovery has been tepid while money growth has been very rapid. The recovery has set records for its weak pace, while money growth has set records for its rapidity. Taylor supplies some of the numbers. Taylor continues an argument he made … Continue reading Easy Money, Slow Growth

Let Them Eat Chips

by Jerry O’Driscoll In today’s Wall Street Journal, David Wessel (“Capital” column, A5) revisits the question of whether current Fed policy is inflationary. He correctly states the Fed’s position is that inflation is caused by expectations. Inflation will stay low if people expect it to stay low.  He quotes Fed Chairman Bernanke: “The state of … Continue reading Let Them Eat Chips

Sand Castle Monetary Policy

by Mario Rizzo   Chairman Ben Bernanke says don’t blame the Fed for rapidly increasing commodity prices and probable bubbles forming in many investment markets throughout the world. I am just doing what is necessary for a recovery in the US and that is in the interests of the world. (See “Bernanke Defends US Policies” Wall … Continue reading Sand Castle Monetary Policy

Monetary Policy At War With Itself

by Mario Rizzo   It is well-known that John Maynard Keynes favored permanently low interest rates in order to foster adequate and stable investment demand. Let us first focus on stability and then we'll see a connection to adequacy.  What happens when counter-cyclical policy (aka Lerner’s “functional finance”) is practiced?   The Wall Street Journal ran an excellent small … Continue reading Monetary Policy At War With Itself