NGDP level targeting – the true Free Market alternative

Tyler Cown a couple of days ago put out a comment on “Why doesn’t the right-wing favor looser monetary policy?” Tyler has three answers to his own question: 1. There is a widespread belief that inflation helped cause the initial mess (not to mention centuries of other macroeconomic problems, plus the problems from the 1970s, […]

The counterfactual US inflation history – the case of NGDP targeting

Opponents of NGDP level targeting often accuse Market Monetarists of being “inflationists” and of being in favour of reflating bubbles. Nothing could be further from the truth – in fact we are strong proponents of sound money and nominal stability. I will try to illustrate that with a simple thought experiment. Imagine that that the […]

M-pesa – Free Banking in Africa?

A number of my readers have an interest in monetary reform and especially in Free Banking. In that regard developments in Kenya are in fact very interesting, but I guess little known to Free Banking theorists. Since 2007 a new “currency” has come to live in Kenya. It is the so-called m-pesa. M for mobile […]

George Selgin outlines strategy for the privatisation of the money supply

I have earlier argued that NGDP targeting is a effectively emulating the outcome under a perfect Free Banking system and as such NGDP level targeting can be seen as a privatisation strategy. George Selgin has just endorsed this kind of idea in a presentation at the Italian Free Market think tank the Bruno Leoni Institute. […]

L Street – Selgin’s prescription for Money Market reform

Yesterday, I wrote a post on George Selgin’s latest presentation on monetary reform at the Italian think tank the Bruno Leoni Institute. In his presentation George essentially outlines a tree step strategy for the privatisation of the supply of money. I described these three steps in my post yesterday, but I would like to take […]

Military dictators are independent as well…

Over the last couple of decades independent central banks have become the norm and it is seen as dangerous if politicians threaten the independence of the central banks. Judging from the short-termism of politicians this in many ways makes perfectly good sense and any modern economist would acknowledge that central bank independence is a good […]

Selgin’s challenge to the Market Monetarists

Anybody who have been following my blog knows how much admiration I have for George Selgin so when George speaks I listen and if he says I am wrong I would not easily dismiss it without very careful consideration. Now George has written a challenge on for us Market Monetarists. In his post “A […]

Robert E. Keleher R.I.P.

I was saddened by the news that Robert E. Keleher has pasted away on May 27 at an age of 67. Keleher pioneered what he termed the Market Price Approach to Monetary Policy. I my view Keleher’s work on monetary policy clearly was similar to Market Monetarism. Here is Kurt Schuler on “Bob’s most […]

Time to try WIR in Greece or Ireland? (I know you are puzzled)

The ECB so far has refused to sufficiently increase the money base to meet the increase in the demand of money and as a result euro zone money-velocity has contracted. We are basically in a monetary disequilibrium. Normally we would say an excess demand for money can be reduced in two ways. Either you can […]

“Fragile by design” – the political causes of banking crisis

Charles Calomiris undoubtedly is one of the leading experts on banking crisis in the world. Calomiris has a new book coming out – co-authored with Stephen Haber. The main thesis in the book – “Fragile by Design: Banking Crises, Scarce Credit,and Political Bargains” – is that banking crisis is not an inherent characteristic of a […]