“Achieving and maintaining price stability is the bedrock principle of a sound monetary policy.” Federal Reserve Governor Ben S. Bernanke There is almost complete unanimity among economists that the most important role of the central bank is to attain price level stability. It is held that price stability promotes economic growth and people’s well
A September 21 announcement by the G-7 finance ministers endorsed less intervention in the foreign exchange market, and triggered a large sell-off of the US dollar. On the day of the announcement, in relation to the end of August, the US currency fell by 4.8% against the Euro and 4.1% against the Yen. Many economists have suggested that the
Two economists who have developed statistical techniques to track economic trends and to measure investment risk—Clive Granger and Robert Engle—were this year awarded the Nobel Prize in economics. In this article I will be focusing on the contribution of Clive Granger to economics. According to the Nobel committee Granger’s important contribution
The yearly rate of growth of money M2 fell to 5.2% in November from 7.5% in October while the yearly rate of growth of money M3 fell to 4.7% in November from 7.5% in the previous month. How seriously should one take the recent softening in the yearly rate of growth of money supply? Some analysts believe that this softening in the growth momentum
In an article in the New York Times on January 15, 2004, Berkeley professor of economics Hal Varian raises a fundamental question: why are the dollar bills in people’s pockets worth anything? According to Varian, there are two possible explanations for this: the dollar bills carry value because the government in power says so or because people are
In his testimony before the Congressional Committee on Financial Services the Chairman of the Federal Reserve Board, Alan Greenspan, said that he could see good chances for a sustainable expansion of the U.S. economy. According to Greenspan: The household sector’s financial condition is stronger, and the business sector has made substantial
On Tuesday February 24, 2004, the chairman of the Federal Reserve, Alan Greenspan, in his testimony to the Senate Banking committee, issued a warning that Fannie Mae and Freddie Mac—the two giant mortgage buyers—have grown so large that they pose a threat to the entire financial system. To reduce this threat the Fed chairman recommends that
In his speech before the Independent Community of Bankers of America on March 17, 2004, the Chairman of the Federal Reserve Board, Alan Greenspan, concluded that the US banking system is in healthy shape. According to the Fed Chairman, the weakness in credit quality that accompanied the recent recession has clearly been mild for the banking
China has experienced one of the great economic transformations in the history of the world, owing to economic reforms that unleashed astonishing productive capacity that had been bottled up for long period of state controls. And yet this transformation has been endangered by the bane of all booms under fiat money: money and credit creation. The
In his speech on May 20, 2004 , a Fed Governor, Ben Bernanke, argued in favor of a gradual approach to interest rate policy settings. According to Bernanke, because policy makers do not have precise knowledge of how the economy will respond to a given change in interest rates it is logical that policy makers should proceed cautiously. In other
What is the Mises Institute?
The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.
