Should central banks do emergency lending?

A barnstorming new paper from the Richmond Fed, written by its President Jeffrey Lacker and staff economist Renee Haltom, argues that the Federal Reserve has drifted into doing too much credit policy to the detriment of its traditional goal of overall macroeconomic stabilisation. In its 100-year history, many of the Federal Reserve’s actions in the nameof financial […]

Inside the Adam Smith Institute

Now that the new Adam Smith website is up, with an exciting plethora of activities and reports scheduled, new readers might like to take stock of what the ASI does, and what motivates us. If labels are used, they might be “free market” and “libertarian,” but these are big tents under which disparate people are […]

The eurozone is in dire need of nominal income targeting

It may well be that, in the US and UK, nominal GDP is growing in line with long-term market expectations.* It may well be that, though we will not bring aggregate demand back to its pre-recession trend, most of the big costs of this policy have been paid. And so it may be that my […]

QE boosts equities by boosting fundamentals

Many people suggest that the recovery in equity prices since 2009-2010, seen around round the world but particularly in the American Nasdaq, S&P500 and DJIA, does not represent a general economic improvement. Instead, they believe that these numbers are simply being buoyed by new money pumped into the system. I don’t think this argument holds, and I will attempt […]

What’s a neutral monetary policy?

The Federal Reserve Bank of Richmond alerted me to a newish paper from one of my favourite economists, Robert Hetzel, entitled “The Monetarist-Keynesian Debate and the Phillips Curve: Lessons from the Great Inflation”—needless to say it’s highly interesting and informative. One bit in particular prompted me to write this screed on neutrality in central banking and monetary […]