Central banks have done nothing to end the boom-and-bust cycle. Instead, their unscrupulous interventions in credit markets just prolong the boom. But it's a huge mistake to assume that bringing market interest rates to zero will create a perpetual boom.
The demand for goods is not constrained by the amount of money, but by the production of goods and services available to trade for money.
In order to expand production and increase productivity — and thus increase the standard of living — it is necessary to use capital. And so it makes sense to pay interest on capital lent, so as to encourage the maintenance and production of capital for the future.
Presented at the Mises Institute's "First Annual Advanced Instructional Conference in Austrian Economics" at Stanford University.
Central banks can only distort and mask real interest rates with monetary policy. Interest rates are really set by each individual's time preference.
Block and Barnett on whether the Hayekian triangle—the popular device used to illustrate how artificially low interest rates lead to an unsustainable boom—can be salvaged or should be abandoned altogether.
Central banks’ economic models predict deeper negative rates are necessary in the event that a significant recession materializes. This would be a disaster.
To understand what an inverted yield curve means, you must first understand what the yield curve is.
People do not save and accumulate capital because there is interest. Interest is neither the impetus to saving nor the reward or the compensation granted for abstaining from immediate consumption. It is the ratio in the mutual valuation of present goods as against future goods.
A private graduate seminar presented at Mises University 2019.
