This paper engages the last testimony of the Chairman of the Federal Reserve System, Alan Greenspan, before a joint session of Congress in July 2005. It identifies nine areas we relate to the arguments of John Kenneth Galbraith, summarized in his recent contribution, The Economics of Innocent...

When the government issues its own nonconvertible currency--also known as a flexible exchange rate policy--the central bank, as monopoly supplier of net reserves to its member banks, is the (exogenous) source of the risk-free yield curve. Furthermore, in the case of government member bank...

This article critiques John B. Taylor's proposal that the Fed use a reaction function to attempt to predict bank demand for reserves. I argue that the Fed does not need to predict the demand for reserves because all the information it requires for hitting its targets is contained in the federal...

Scott Carter (2011) reproduces and discusses correspondence between Simon and Solow in 1971, where Simon first outlined his critique that estimations of production functions merely capture an underlying accounting identity. This idea culminated in a paper published by Simon in 1979 in the...</i>

Relevant economic literature frequently focuses on the impact of credit shocks on housing prices. The macroeconomic doctrine of the new consensus macroeconomics completely ignores bank credit. However, the Great Recession has highlighted the importance of bank credit. The purpose of this article...

Relevant economic literature frequently focuses on the impact of credit shocks on housing prices. The macroeconomic doctrine of the new consensus macroeconomics completely ignores bank credit. However, the Great Recession has highlighted the importance of bank credit. The purpose of this article...

Current economic policy upgrades monetary policy and downgrades fiscal policy. Monetary policy involves the manipulation of the central bank interest rate, with the specific objective of achieving the main goal of monetary policy, which is, in most cases, the inflation rate. Fiscal policy should...

This paper attempts to quantify the U.S. housing market slump and its likely impact on consumption. In doing so, it bypasses the traditional approach that suggests that there is no nationwide housing market but a compendium of segmented markets. The paper is not an exercise in forecasting but an...