News
WSJ | Gauging the Triggers to Fed Action
The Federal Reserve's unconventional measures to boost the recovery in recent years have followed a pattern in benchmarks of the economy's health. In months before past Fed action, private payroll growth worsened, the economy stalled or contracted and stocks weakened, depressing consumer and business confidence.
CNN Money | Central banks take center stage
As central bankers in Europe and the United States gather this week, investors around the world are wondering what the monetary authorities will do to support the global economy.
Politico | Fed running out of ammo
When it comes to aiding the economy, the Federal Reserve is the only game in town, but the central bank may not have much game left.
Econ Comments & Analysis
Bloomberg | Ben Bernanke Could Lose for Same Reason as Olympic Sailor
Ben has the right map. That’s the assumption about Ben Ainslie, the U.K.’s top sailor, as he competes in the Olympics this week.
Washington Times | Bernanke and Draghi: Bluff and bluster
Two of the most powerful men in the world, supposedly, are Ben S. Bernanke and Mario Draghi, the respective chairmen of the Federal Reserve and the European Central Bank (ECB). Central banks, and therefore central bankers, are supposed to be powerful; today, not so much.
AEI | The Fed should do more
All eyes are on the Fed today, as the Federal Open Market Committee (FOMC) concludes its fifth policy meeting of the year. Expectations are running high for further easing at this meeting to support the anemic economy.
Bloomberg | Central Banks’ Unorthodox Actions Are Cutting Lending
The unintended consequences of financial policy intervention are providing fresh evidence for chaos theory’s idea that the flap of a butterfly’s wings can spark a tornado on the other side of the world.
Blogs
NY Times | The Fed Should Stop Paying Banks Not to Lend
The Federal Open Market Committee, the policy-making arm of the Federal Reserve, meets Tuesday and Wednesday to discuss what, if anything, it will do to stimulate economic growth. There is widespread speculation that it will adopt further “quantitative easing” and inject more money into the economy.
Free Banking | Friedman and free banking
Friedman’s ideas on monetary policy changed over time. He began as a convinced Keynesian. Then, of course, he became the leader of the monetarist school, and wrote with Anna Schwartz the groundbreaking Monetary History of the United States, 1867-1960. The most influential aspect of the book was how it changed the views of economists about what caused the Great Depression—and, by implication, many other economic disasters.
Coordination Problem | Imposed versus Adopted Monetary Rules
One kind of rule is what we might call a policy-guiding rule (or what Buchanan might call a “post-constitutional rule”), such as the Taylor Rule. Yes, it’s a rule, but it’s a rule that informs the central bank of what sort of action it should take.
