Changes in government deposits and money supply
The US debt ceiling suspension, signed in February 2018, expires at the beginning of March this year. Some commentators are of the view…
Importance of model building in economics
In the natural sciences, a laboratory experiment can isolate various elements and their movements. There is no equivalent in the discipline of economics….
Tax cuts without reducing government outlays is not possible
According to many economic experts and commentators, an effective way to generate economic growth is through the lowering of taxes. The lowering of…
Does transparent monetary policy lead to economic stability?
In his various writings, the champion of the monetarist school, Milton Friedman, argued that there is a variable time lag between changes in money…
The Difference between Money Supply & Liquidity
The US debt ceiling suspension, signed on February 2018, expires in March this year. According to some experts, the US Treasury will have to…
Why is savings not about money?
Conventional wisdom says that savings is the amount of money left after monetary income was used for consumer outlays, implying that saving is…
Is an increase in demand key for economic growth?
Whenever the so-called economy shows signs of weakness most experts are of the view that what is required to prevent the economy sliding into…
Liquidity and the stock market
In a market economy, a major service that money provides is that of the medium of exchange. Producers exchange their goods for money…
The neutral interest rate myth
In his speech to the Economic Club of New York on November 28 2018, the Federal Reserve Board Chairman Jerome Powell said that…
Why velocity of money and the purchasing power of money are not related?
Some commentators are of the view that when the velocity of money rises, all other thing being equal, the buying power of money…