Building a bridge is costly: It takes labor and machinery and raw materials that have alternative uses. Does it follow that building it is a waste? No. Waste occurs when the cost incurred exceeds the benefit attained. Cost greater than zero does not imply cost greater than…
The post How to Think Straight about Bitcoin’s Social Costs and Benefits appeared first on Alt-M.
(As the Fed is once again planning to unwind its balance sheet, the size of which doubled as a result of its COVID-19-crisis Quantitative Easing, we think it worthwhile to draw your attention to a 2017 exchange, on the fiscal implications of such an unwind, between two…
The post <span class=”friday”>Friday</span> <span class=”flashback”>Flashback:</span>Why there is no Fiscal Case for the Fed’s Large Balance Sheet appeared first on Alt-M.
Twice now, on this forum back in 2013, and on Twitter more recently (see here and here), I’ve taken Yale economics professor Gary Gorton’s publications to task for misrepresenting the historical record of private currency systems. In particular, I’ve criticized him for claiming, on the basis of evidence…
The post Making Money Myths appeared first on Alt-M.
The Fed’s long-awaited report on central bank digital currencies is finally out. Although the report makes it clear that the Fed has no immediate plans to issue a digital currency, it does point to the approach the Fed would be inclined to take were it to do…
The post Missed it by <em>That</em> Much: Where the Fed’s Digital Currency Proposal Goes Wrong appeared first on Alt-M.
Ever since Federal Reserve Chairman Jerome Powell described cyclical or COVID-related elements of inflation as “transitory” (an ambiguous phrase now retired), critics repeatedly seized on year-to-year changes in price indexes as evidence that inflation was instead accelerating every month. As I have noted before, however, the stubborn…
The post Producer Prices for Goods Rise and Fall with Oil Prices appeared first on Alt-M.
Starting with the April 2021 release, virtually every monthly Consumer Price Index (CPI) report has indicated some form of abnormally high inflation. For instance, the April CPI rose 4.2 percent over the previous 12 months, the largest year-to-year increase since the period ending September 2008. Similarly, the…
The post Inflation: A Brief Look Back, and A Path Forward appeared first on Alt-M.
I’ve often drawn attention here to the virtues of the Canadian banking system, especially as it was between the passage of Canada’s first Bank Act in 1871 and the establishment of the Bank of Canada in 1935. After the Scottish banking system that flourished between 1716 and…
The post An Unnecessary Evil: How Canada ended up Insuring Bank Deposits appeared first on Alt-M.
Many economists acknowledge that ordinary private goods and services need to “pass the market test”—generate revenue in excess of expenses—to show that consumers’ benefits (revealed by a willingness to pay) exceed producers’ outlays. But they make an exception when it comes to monetary instruments and payment systems….
The post About Your Proposal for Better Payment Arrangements: Does it Pass the Market Test? appeared first on Alt-M.
“The fateful errors of popular monetary doctrines which have led astray the monetary policies of almost all governments would hardly have come into existence if many economists had not themselves committed blunders in dealing with monetary issues and did not stubbornly cling to them.” —Ludwig von Mises,…
The post A Three-Pronged Blunder, or, what Money is, and what it isn’t appeared first on Alt-M.