Wednesday, January 27

Tag: Money and Inflation

Daniel Kaufmann on Swiss monetary policy
Forex News

Daniel Kaufmann on Swiss monetary policy

My biggest frustration over the past decade is how often I see economists misdiagnose the stance of monetary policy, either reasoning from price changes or reasoning from quantity changes. The “reason from a price change” problem has been discussed extensively in this blog, so today I’ll focus on reasoning from a quantity change.Many economists assume that a country that has done extensive QE has, ipso facto, adopted an expansionary monetary policy. That is certainly true in some cases, but in other cases the QE is a defensive move, an endogenous response to previous tight money policies that drove nominal interest rates to zero and money demand to very high levels.Thus I was very pleased when David Beckworth directed me to an article that gets the causation right. The article is by ...
Larry White on Bitcoin
Business news

Larry White on Bitcoin

In “Has Bitcoin Succeeded?,” Alt-M, December 23, 2020, Larry White of George Mason University has a nicely nuanced piece on, as will not surprise you if you read the title, whether Bitcoin has succeeded. As Larry says, the answer depends on the goal. As a widely used private alternative to government fiat money, it has not succeeded yet. As an asset that has gained in value, it has succeeded wildly.Larry nicely walks the reader through the ins and outs of Bitcoin and does so mainly by taking on Bitcoin critic Edward Hadas. Larry writes:Starting from an (overstated) argument, to the effect that Bitcoin would not become a commonly accepted medium of exchange, Hadas leapt to the prediction that Bitcoin would have zero use and zero market value.  Bitcoin today in fact occupies an interme...