This piece from Vox Eu provides a good run down of one of the issues of that exists when we have a central bank as a lender of last resort – moral hazard. The prospect of receiving liquidity support may distort banks’ risk-taking incentives to a much larger extent than has been acknowledged up to …
Category Archive: Monetary economics
Permanent link to this article: http://www.tvhe.co.nz/2011/10/17/moral-hazard-the-case-to-increase-regulation/
Sep
28
2011
Another reason why we miss Friedman
Here. If he was around to push the policy debate maybe we wouldn’t be in this much of a mess. On that note, people who know nothing about economics or the allocation of resources more generally like to demonise Friedman – this is nonsensical. The guy pushed for a negative income tax/minimum income level, he …
Permanent link to this article: http://www.tvhe.co.nz/2011/09/28/another-reason-why-we-miss-friedman/
Sep
26
2011
A point on inflation for all of us to remember
From the always excellent Money Illusion blog: The key point is that if the Fed pays attention to inflation at all, it should be increases in the price of stuff built with American labor. They shouldn’t care about the inflation rate that matches some mythical “cost of living,” as the Fed can’t do anything about …
Permanent link to this article: http://www.tvhe.co.nz/2011/09/26/a-point-on-inflation-for-all-of-us-to-remember/
Sep
14
2011
Watch the curve: Thoughts for the RBNZ September MPS
Tomorrow its more than likely the RBNZ will leave the official cash rate unchanged. Following that a lot of people are going to say one of the following: Bah, the world is in crisis they should slash rates Bah, inflation expectations are elevated and CPI growth is high, they should be increasing rates Or who …
Permanent link to this article: http://www.tvhe.co.nz/2011/09/14/watch-the-curve-thoughts-for-the-rbnz-septembermps/
Sep
14
2011
Papers on the old new financial crisis
Brad Delong links to a number of interesting papers regarding the US/global financial crisis of 2007-2009. I recommend the optional ones. I’m not sure I completely agree that the bailing out of Bear Stearns made matters worse – but it was an interesting perspective. In any case, its a good idea to try and understand …
Permanent link to this article: http://www.tvhe.co.nz/2011/09/14/papers-on-the-old-new-financial-crisis/
Sep
08
2011
Sometimes TVHE does raise points
Over at Money Illusion Scott Sumner states: The recent Swiss devaluation has led to some interesting reactions in the blogosphere. But one angle that I haven’t seen discussed is the relationship of the Swiss action and bubble theory. Within an hour or two of the announcement we had said (in additional to the straight avoiding …
Permanent link to this article: http://www.tvhe.co.nz/2011/09/08/sometimes-tvhe-does-raise-points/
Recent Comments