In my prior post, "The Futility of Stimulus," I examined whether Federal Reserve Policy has provided economic stimulus. I employed standard measures of money-supply growth to evaluate the question. I concluded that Federal Reserve policy has resulted in less expansion of the money supply than would normally…
George Selgin has recently focused on the failure of Federal Reserve policy to finance a normal recovery. The Fed has greatly expanded its balance sheet and created a large quantity of excess reserves, which, for a variety of reasons, commercial banks have not mobilized into credit creation….
Did the Fed set its policy interest rate below the market-clearing or 'natural' interest rate level in the early-to-mid 2000s? Or did it simply lower its policy interest rate down to a depressed natural interest rate level during this time? The answers to these questions determine whether…
Plenty of writers have claimed that the Fed fueled the sub-prime boom by holding interest rates too low for too long after the dot-com crash. But hardly anyone has tried to explain why it did so. Yours truly has taken a stab at it, together with his…
Lately more and more people seem inclined to congratulate the Fed for the great job it has done saving us from another Great Depression and getting the U.S. economy back on its feet. Frankly, I'm getting tired of it. It's not that I'm cock-sure that the Fed's post-2008 actions haven't…