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Working Paper
What Caused the Great Recession in the Eurozone?
Since 2008, the Eurozone has undergone two recessions, which together constitute the "Great Recession." The combination of a decline in output and disinflation as well as a persistent decline in inflation suggests that contractionary monetary policy was one factor. This paper makes two methodological points. First, in analyzing the causes of the Great Recession, it is important to distinguish between credit and monetary policy. Second, a multiplicity of estimated models can "explain" the Great Recession. In practice, economists choose between models through an associated narrative that ...
Journal Article
M2 and monetary policy
Consistent with its mandate in the Humphrey-Hawkins Act of 1978, the Federal Reserve System each year sets a calendar-year target for the monetary aggregate M2. This paper examines the effect of specifying the M2 target as a multiyear trend line and concludes that an operationally significant target for M2 in the form of a trend line that rises at three percent per year will eliminate inflation.
Journal Article
Indexed bonds as an aid to monetary policy
A measure of the publics expectation of inflation would assist the Fed in formulating monetary policy. In order to create such a measure, the U.S. Treasury could issue its debt in two forms: standard debt and debt indexed for inflation. The difference in yield on these two forms of debt would measure the publics expectation of inflation.
Journal Article
The cause of the dollar depreciation
An abstract for this article is not available
Working Paper
ECB monetary policy in the recession: a New Keynesian (old monetarist) critique
Use of the New Keynesian model to identify shocks points to contractionary monetary policy as the cause of the Great Recession in the Eurozone.
Journal Article
Should increased regulation of bank risk-taking come from regulators or from the market?
The heavy losses in bank asset portfolios do not reflect an inherent failure of markets to monitor risk adequately but rather the perverse incentives of the financial safety net to excessive risk-taking. The unsustainable rise in house prices and their subsequent sharp decline derived from the combination of a public policy to expand home ownership to unrealistic levels and from a financial safety net that encouraged excessive risk-taking by banks.
Journal Article
The quantity theory tradition and the role of monetary policy
An abstract for this article is not available.
Journal Article
Free enterprise and central banking in formerly communist countries
According to this article, if the formerly Communist countries of Eastern Europe are to become free market economies, they will have to define and enforce property rights and allow prices to signal supply and demand conditions. Further, the article suggests that the market economy and integration into the world economy would be enhanced by adopting the currency of a large Western country, thereby eliminating the need for a central bank.