Lately the old-timers here at Cato's Center for Monetary and Financial Alternatives — which is to say, Jim Dorn and I — have been talking a lot about the Phillips Curve, which seems to be playing a part in monetary policy discussions today almost as big as…
The familiar chart below illustrates the depth of the decline in real output during the 2007-09 Great Recession (the shaded period), and the failure of the recovery to return real output to its “potential” path (in other words, to eliminate the estimated “output gap”) during the subsequent…
Changes in the general level of prices are capable, as we've seen, of eliminating shortages or surpluses of money, by adding to or subtracting from the purchasing power of existing money holdings. But because such changes place an extra burden on the price system, increasing the likelihood…
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…