Monday , November 29 2021
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The author Lars Christensen
Lars Christensen
International economist, Money Doctor, Founder of Markets & Money Advisory, Research Associate Stellenbosch University [email protected] +45 52 50 25 06

The Market Monetarist

Paper: Financial regulation, demand for ‘safe assets’, and monetary conditions

I have a new paper out at Center for Corporate Governance at Copenhagen Business School. Here is the abstract: In the aftermath of the economic and financial shock of 2008-10, the wider policy debate has often turned on why inflation has remained very subdued and interest rates and bond yields historically low despite a marked drop in interest rates and a significant increase in the money base in the US and the euro zone. In this paper, we try to explain these developments with...

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10 years of Market Monetarist thinking

On this day ten years ago I published a Working Paper on Marcus Nunes’ blog “The Faint of Heart” with the title “Market Monetarism – The Second Monetarist Counter-revolution”. This is the Working Paper in which I coined the term “Market Monetarism”. Little did I know that over the following decade monetary scholars as well as central bankers would refer to market monetarism as a school of thought and little did I know that market monetarism would have such an impact on monetary policy...

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The Fed’s Average Inflation Target (AIT) will soon tell the Fed to aim for DEFLATION

Back in April I warned that given the massive expansion of the US broad money supply we could very well be heading from double-digit inflation in the US later in 2021 or 2022. At that time inflation was at 1.6% (March). Today we got inflation for June – and now inflation is at 5.4% and core inflation is at the highest level in 30 years. So far my inflation simulation seems to be pretty much on track. But that is not the topic for this blog post – at least not the main...

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Steve Horwitz, Mensch, economist and classical liberal scholar. A last farewell.

One of my great intellectual heroes is no more. Economist and classical liberal scholar Steve Horwitz has died. Steve lost the fight to cancer. Far too young. Steve and I was in contact over the years and he was always an extremely kind person and even when we disagreed (which wasn’t often) he always remained a gentleman scholar. A real Mensch. Steve Horwitz was a great economist and particularly is writing on monetary disequilibrium inspired me a great deal. He was an...

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Heading for double-digit US inflation

I have spend a lot of my time since 2008 arguing that US monetary policy was much less expansionary than most people thought and has been arguing for a more aggressive response from the Federal Reserve to combat deflationary pressures. Furthermore, I have last year welcomed the Fed’s policy respond to the lockdown crisis – see for example here – as I feared a repeat of the deflationary shock of 2008-9. Furthermore, even though I have been somewhat worried about the sharp pick up...

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Post-Covid Recovery – fast, but inflationary

I have become substantially more worried about inflation than I was last summer and I now believe we will see a very significant increase in inflation in the US in the coming months. I will write more on that in the coming week, but until then have a look at this presentation that I did recently at the Danish Chamber of Commerce in Lithuania on April 15. Watch the presentation here. [embedded content] Share this:Like this:Like Loading...

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R* strikes back: The Fed will hike sooner rather than later

The Federal Reserve’s mandate is clear – ensuring the maximum level of employment while at the same time ensuring price stability. Over time the Fed’s interpretation of this mandate has changed, but we can maybe get a bit closer by saying that the Fed has an ordering of the dual mandate. First the Fed wants to insure that inflation (inflation expectations) over time is close to 2%. Second, once this is the case the Fed will try to “push” economic activity in the “right”...

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Tweeting on Central Bank Digital Cash

As part of my on-going research at Copenhagen Business School on the future of the Nordic banking sector and monetary policy have been researching the idea of Central Bank Digital Currency or rather as I prefer to Central Bank Digital CASH (CBDC). Tonight I have been tweeting on some ideas and views regarding CBDCs and as with private cryptocurrencies it is not really the technology, which interests me, but rather the monetary aspects of CBDCs and what the importance for the conduct...

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