Milton Friedman was right about a lot of things. He was wrong about quite a bit, too. The stuff where he erred is what central banks now do in his name. The activist central bank is an outgrowth of monetarism, the academic approach to rethinking the Great Depression after Friedman and Anna Schwartz published A Monetary History. Toward the end [...]
The Reserve Bank of India (RBI) cut its benchmark money rate for the second straight meeting. Reducing its repo rate by 25 bps, down to 6%, the central bank once gripped by political turmoil has certainly shifted gears. Former Governor Urjit Patel was essentially removed (he resigned) in December after feuding with the federal government over his perceived hawkish stance. [...]
On August 12, 1985, Japan Airways flight 123 left Tokyo’s Haneda Airport on its way to a scheduled arrival in Osaka. Twelve minutes into the flight, the aircraft, a Boeing 747, suffered catastrophic failure when an aft pressure bulkhead burst. The airplane had been improperly repaired from a tailstrike (the tail of the aircraft actually hitting the runway pavement) seven [...]
Those were the days. The minivan was king, a relatively new phenomenon that domestic automakers were hoping would help them stave off increasing import pressure. In 1990, Chrysler, for example, had used the success of its Dodge Caravan and Plymouth Voyager, along with the introduction of its Town & Country luxury (I suppose) model, to maintain its number three spot [...]
Over the last several years, we’ve been bombarded with mainstream stories about how interest rates have nowhere to go but up. Inflation, recovery, and most of all fundamentals. Who in their right mind is going to buy all this government debt! The supply is rising and, according to these people, the demand can only be falling. There is nothing in [...]
Ever since the widespread adoption of the rules, so to speak, of Positive Economics the discipline has been trading intuitive sense for mathematics. The equations of econometrics are, for Economists, more “real” than reality. To get to those statistical regressions it requires a whole lot of subjectivity. It doesn’t seem that way at first, or that it could be this [...]
The Chinese economy had been sailing along fairly smoothly in the aftermath of the Great Somehow Global “Recession.” While the economies of Europe and the United States seemed suspiciously subdued especially given the scale of the contraction which registered in each, EM economies appeared unbothered. Then came 2011. There were already escalating warnings coming out of 2010, but in the [...]
At the end of last week, the Bureau of Economic Analysis reported data on US Personal Income and Spending that hit every sour note. There was the lowest inflation rate, the deflator to those spending figures, in years as well as the clear need to officially anoint a successor to the Verizon madness. The release also featured residual seasonality, and, [...]
In a way, the government shutdown couldn’t have come at a more opportune moment. As workers all throughout the sprawling bureaucracy were furloughed, markets had run into chaos. Even the seemingly invincible stock market was pummeled, a technical bear market emerged on Wall Street as people began to really consider increasingly loud economic risks. There had been noises overseas, troubling [...]
The BEA has completed its unscheduled departure from its release schedule. Due to the prior federal government shutdown, the government agency was only able to put together two estimates for Q4 2018 real GDP. The first had seemed to calm some fears that US growth was wobbly toward the end of last year, aligning uncomfortably with what we are more [...]
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