Max Gillman

These series grow at similar rates, at times. real m1 and real gdp percentage change annual rate This is the real income effect on money demand

A Stable money demand, more or less. Real M1 divided by Real GDP against 3-month US Treasury Bill Rate Real M1 money as normalized by real output moves opposite of the Short Term Interest rate as in standard theory of money demand. This is the Price effect on money demand.

Real M1 and Federal Debt as percent of GDP With M1/CPI being Real M1, its relation to US Federal debt as a share of GDP implies that the Federal Reserve System appears to be printing money by buying US Treasury debt whenever the US Treasury debt goes up. This is the Fiscal Revenue effect of … More Real M1 and Federal Debt as percent of GDP

Friedrich A. Hayek’s 1944 acclaimed Road to Serfdom (reproduced by the Institute for Economic Affairs online) supports social insurance for when markets work imperfectly, a long tradition in neoclassical economics now reflected in practice by the implicit or explicit social insurance linked to nearly all fiscal policy: “Nor is there any reason why the state … More International Deposit Insurance with Risk-Based Premia

  Here is today’s Headline: “UBS Is Fined $4.2 Billion in French Tax-Evasion Case: Judges find the Swiss lender guilty of illegally recruiting clients in France and helping them launder money that wasn’t declared to authorities” The rest of the Wall Street Journal article is here: WSJ article on Banks Providing Tax Evasion This headline … More Banks Intermediate Tax Evasion Services

Time for Positive Interest Rates for Savers Federal Reserve interest rates of 2% to 2.25% aren’t neutral if the inflation rate is 2.61%. 8 Comments Nov. 1, 2018 1:10 p.m. ET Federal Reserve Chairman Jerome Powell speaks in Washington, June 13. Photo: michael reynolds/EPA/Shutterstock In “Pause Interest-Rate Hikes to Help the Labor Force Grow” (op-ed, … More WSJ: Time for Positive Interest Rates for Savers

Extract from new forthcoming Berkeley E Journal of Macroeconomics: Advances, “The Welfare Cost of Inflation with Banking Time”, Max Gillman, 2018. Below is Section 2 of this article: “US Law on the Target Inflation Rate” According to the US Federal Reserve Bank the FOMC (Federal Open Market Committee) has since 2012 adopted an explicit inflation … More US Law on the Target Inflation Rate

The Wall Street Journal: Letter “Fed Should Slowly Unwind Excess Reserves” Before 2008, competition between banks forced them to loan out or otherwise invest excess reserves. 4 Comments Sept. 26, 2018 3:15 p.m. ET SEC chairman, Jay Clayton in April Photo: Yuri Gripas/Bloomberg News Regarding your editorial “Sharing the Wealth of Markets” (Sept. 21): Yes, … More WSJ:”Fed Should Slowly Unwind Excess Reserves”

Thomas Gordon : Writing in Wall Street Journal: December 14, 2017 @Max Gillman Good comments and informatory about why banks are now paid interest  on reserves.   As it concerns the article, I don’t think they were paying a huge interest rate (I thought it was less than 1%, but probably more than most banks were … More Comment on “Cold Turkey and Moral Hazard”

By MAX GILLMAN and DAVID C. ROSE April 2017 Two weeks ago President Trump told House leaders that he liked most of the House Ways and Means Committee’s “Blueprint” for tax reform. The blueprint does indeed significantly improve tax policy in a number of ways. But a careful consideration of what the latest economic theory … More Turning a Good Blueprint for Tax Reform into a Great One