The Fisher-Hetzel Standard: A much improved “gold standard”

Anybody who follow my blog will know that I am not a great fan of the gold standard or any other form of fixed exchange rate policy. However, I am a great fan of policy rules that reduce monetary policy discretion to an absolute minimum. Central bankers’ discretionary powers should be constrained and I fundamentally […]

The Casselian-Mundelian view: An overvalued dollar caused the Great Recession

This is CNBC’s legendary Larry Kudlow in a comment to my previous post: My friend Bob Mundell believes a massively over-valued dollar (ie, overly tight monetary policy) was proximate cause of financial freeze/meltdown. Larry’s comment reminded me of my long held view that we have to see the Great Recession in an international perspective. Hence, […]

Merry Christmas – and why Fisher’s Compensated dollar plan remains highly relevant

Today is Christmas Eve and in Denmark that is the most important day of Christmas (just ask my son!) so it is not really time for blogging. So instead I will do a bit of a re-run of a blog post I wrote exactly a year ago. If there is a area where my thinking […]

Depression Remedy – what we can learn from old newspaper articles

I strongly believe that we can learn a lot about the present crisis from studying economic and monetary history. Particularly the study of the Great Depression should be of interest to anybody who is interested in the causes of the present crisis and how to get us out of the crisis. Scott Sumner would hence […]

Bob Hetzel’s great idea

As I have promised earlier I will in the coming weeks write a number of blog posts on Robert Hetzel’s contribution to monetary thinking celebrating that he will turn 70 on July 3. Today I will tell the story about what I regard to be Bob’s greatest and most revolutionary idea. An idea which I […]

Unfocused vacation musings on money – part 3

I am going to keep this short and make just a few observations. The Egyptian tragedy – fix the economy please   Cato’s Dalibor Rohac has a good comment on Egypt. This is a bit of it: “What needs to be done? First, the country’s unsustainable fiscal situation calls for decisive action. That means the […]

The Compensated dollar and monetary policy in small open economies

It is Christmas time and I am spending time with the family so it is really not the time for blogging, but just a little note about something I have on my mind – Irving Fisher’s Compensated dollar plan and how it might be useful in today’s world – especially for small open economies. I […]

The Fisher-Friedman-Sumner-Svensson axis

Here is Scott Sumner in 2009: “People like Irving Fisher had a perfectly good macro model.  Indeed, except for Ratex it’s basically the model that I use in all my research.  But the problem is that these pre-1936 models didn’t use Keynesian language.  And they didn’t obsess about trying to develop a general equilibrium framework. […]

Tyler Cowen on the gold standard

Here is Tyler Cowen on the gold standard: “The most fundamental argument against a gold standard is that when the relative price of gold is go up, that creates deflationary pressures on the general price level, thereby harming output and employment. There is also the potential for radically high inflation through gold, though today that […]

The Fed can hit any NGDP target

I hate getting into debates where different bloggers go back and forth forever and never reach any conclusion. I am not blogging to get into debates, however, I must admit that Steven Williamson’s recent posts on NGDP level targeting have provoked me quite a bit. In his first post Williamson makes a number of claims, […]