[ This article is excerpted from the December issue of The Free Market , and is adapted from the fifth chapter of 2014’s The Fed at One Hundred , edited by David Howden and Joseph Salerno . ] Throughout the existence of the Fed, its officers and intellectual supporters understandably asserted that the government’s movement toward central banking
As the financial crisis of 2008 took shape, the policy recommendations were not slow in coming: why, economic stability and American prosperity demand fiscal and monetary stimulus to jump-start the sick economy back to life. And so we got fiscal stimulus, as well as a program of monetary expansion without precedent in US history. David Stockman
In a recent interview, Jeb Bush said that in order for the United States to reach a higher level of economic growth, “people need to work longer hours.” Leftists immediately jumped on this comment as proof that Bush is horribly out of touch with ordinary working Americans. Bush soon backtracked and attempted to explain that what he really meant
In May, the US unemployment rate stood at 5.5 percent against the rate of 5.3 percent for the “natural unemployment,” also known as the Non-Accelerating Inflation Rate of Unemployment (NAIRU). According to the popular view, once the actual unemployment rate falls to below the NAIRU, or the natural unemployment rate, the rate of inflation tends to
In recent years, home price indices have seemed to proliferate. Case-Shiller, of course, has been around for a long time, but over the past decade, additional measures have been marketed aggressively by Trulia, CoreLogic, and Zillow, just to name a few. Measuring home prices has taken on an urgency beyond the real estate industry because for many,
We live in a world of massive monetary inflation and extremely low interest rates. Mortgage rates are near historic lows and yet it seems that people cannot get loans . Home sales are up, but with a near record percentage of sales made with cash , rather than a mortgage. The unemployment rate is nearing “full employment” and yet a record number of
The Swiss central bank’s recent move to de-peg the Swiss franc from the euro reminds us of the importance of choice in currency. By pegging the Swiss franc to the euro, the Swiss central bank was in effect subsidizing the euro by refusing to compete with it. If carried into the long term, this would have meant a de facto monetary union between the
Austrians oppose the whole notion of trying to accurately measure “inflation” which mainstream economists see as a general rise in prices. (Austrians view inflation as a politically engineered increase in the money supply.) A few years ago, mainstream economists like Paul Krugman chastised the Austrians for the lack of anticipated price inflation
In terms of theatrical impact, the first performance of the Republican majority in the Senate responding to semi-annual testimony from Fed Chair Yellen was a dud. That is bad news for US monetary reform. The root cause of the theatrical failure is that a winning strategy for monetary revolution has failed to emerge from the Republican ranks.
[ This article is adapted from Chapter 11 of The Fed at 100: A Critical View on the Federal Reserve System .] The starting point for any serious reflection on our subject is the fact that money production does not bring about uniform and simultaneous changes. An increasing money supply tends to entail a higher money price level, but the individual
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.