Frank Shostak Archive

Does Deflation Pose a Threat to the US Economy?

October 13, 2009 7:59 AM by Frank Shostak

Does it make sense that a fall in prices should actually cause people to postpone buying goods? To maintain their life and wellbeing individuals must live at present. FULL ARTICLE

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Does a Liquidity Trap Pose a Threat?

September 23, 2009 7:07 AM by Frank Shostak

In the popular framework of thinking, which originates in the writings of John Maynard Keynes, economic activity is presented in terms of a circular flow of money. Spending by one individual becomes part of the earnings of another individual, and spending by another individual becomes part of the first individual's earnings.

Recessions, according to Keynes, are a response to the fact that consumers -- for some psychological reasons -- have decided to cut down on their expenditures and raise their savings.

For instance, if for some reason people have become less confident about the future, they will cut back on their outlays and hoard more money. So, once an individual spends less, this worsens the situation of some other individual, who in turn also cuts his spending.

Consequently, a vicious circle sets in: the decline in people's confidence causes them to spend less and to hoard more money, and this lowers economic activity further, thereby causing people to hoard more. FULL ARTICLE

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Is the Fed's Pumping Inflationary?

September 16, 2009 8:02 AM by Frank Shostak

Even former Federal Reserve Chairman Alan Greenspan is alarmed by the massive pumping of the Fed and other central banks. At the same time, a new school has emerged to say that, despite appearances, there is no problem. Who is right? FULL ARTICLE

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Does Loose Monetary Policy Cause Economic Growth?
2009.09.01 | Comments (22)

What Is the Condition of US Savings?
2009.08.20 | Comments (20)

How Can the Fed Prevent Asset Bubbles?
2009.08.13 | Comments (23)

Is the US Economy Close to Hitting Bottom?
2009.07.24 | Comments (19)

The Fed Might Have Painted Itself into a Corner
2009.06.11 | Comments (11)

Can More Inflation Revive the US Economy?
2009.06.01 | Comments (37)

Can President Obama's Policies Heal the US Economy?
2009.05.20 | Comments (21)

Obama's Stock Market Mini-Bubble
2009.05.12 | Comments (17)

Harvard's professor scheme to revive the economy
2009.04.27 | Comments (15)

Would Cleansing Banks' Balance Sheets Kick-start the US Economy?
2009.04.01 | Comments (24)

The Fed Did It, and Greenspan Should Admit It
2009.03.19 | Comments (23)

Printing Like Mad
2009.02.17 | Comments (44)

Indicted for Predicting Doom
2009.01.22 | Comments (10)

Can Fiscal Stimulus Revive the US Economy?
2009.01.22 | Comments (37)

Mondustrial Policy
2009.01.11 | Comments (3)

Why Congress Must Stop the Fed's Massive Pumping
2009.01.06 | Comments (46)

Can Friedman's Money Rule Stabilize the Economy?
2008.11.12 | Comments (91)

Do We Need More of Keynes Now?
2008.10.31 | Comments (78)

Pushing on a (very long) string
2008.10.23 | Comments (8)

Good and Bad Credit
2008.10.16 | Comments (56)

Massive Pumping by the Fed
2008.10.02 | Comments (14)

The Rescue Package Will Delay Recovery
2008.09.29 | Comments (17)

Can the Rescue Plan Fix the US Economy?
2008.09.22 | Comments (38)

Are Fannie and Freddie Too Big to Fail?
2008.09.17 | Comments (28)

Is Deleveraging Bad for the Economy?
2008.08.20 | Comments (15)

Commodity Prices and Inflation: What's the Connection?
2008.07.01 | Comments (214)

The Oil-Price Bubble
2008.06.02 | Comments (141)

Why the Fed Can't Do What It Wants to Do
2008.04.03 | Comments (26)

The Fed's New Tricks Are Creating Disaster
2008.03.19 | Comments (11)

Is Something Out of Nothing Possible?
2008.02.22 | Comments (41)

Why Is Bernanke Trying to Fight the Bear?
2008.01.30 | Comments (19)

Does the Current Financial Crisis Vindicate the Economics of Hyman Minsky?
2007.11.27 | Comments (30)

Greenspan Absolves Himself
2007.11.06 | Comments (8)

What's Behind the Fed's Aggressive Interest-Rate Cut?
2007.10.23 | Comments (4)

What Caused the Liquidity Crunch?
2007.07.31 | Comments (13)

Are Profits Purely Random?
2007.07.24 | Comments (12)

Marginal Utility and Interest Formation
2007.07.03 | Comments (5)

Marginal Utility Is Not Rocket Science
2007.06.05 | Comments (7)

The Fallacy of Inflation Targeting
2007.05.16 | Comments (223)

Does Fed Transparency Fuel Growth?
2007.04.20 | Comments (16)

Money and Inflation: The Tendency to Deny Reality
2007.03.27 | Comments (219)

The Yen and Monetary Liquidity
2007.03.20 | Comments (17)

Do Central Banks Really Inflate? No, Say the Post-Keynesians
2007.03.01 | Comments (110)

Have We Outgrown Recessions?
2006.11.28 | Comments (15)

Is Debt Alone a Threat?
2006.11.02 | Comments (90)

Did Phelps Really Explain Stagflation?
2006.10.10 | Comments (35)

The Prophet of the Great Depression
2006.10.04 | Comments (12)

Will An Oil Price Fall Push Inflation Down?
2006.09.21 | Comments (9)

Money and the Stock Market: What is the Relation?
2006.08.29 | Comments (8)

Who Knows the Neutral Rate of Interest? Not the Fed
2006.05.17 | Comments (9)

How China's monetary policy drives world commodity prices
2006.05.01 | Comments (21)

Bernanke's Yield Curve Confusions
2006.03.28 | Comments (14)

Should We Worry about Falling Savings?
2006.02.22 | Comments (43)

Does the widening US trade deficit pose a threat to the economy?
2006.02.03 | Comments (31)

Brimelow on the Austrians
2005.11.03 | Comments (1)

The Ascension of Bernanke Into the Clouds
2005.10.27 | Comments (20)

Is the Fed an Inflation Fighter or Creator?
2005.10.25 | Comments (45)

The Myth of the Magical Multiplier
2005.08.19 | Comments (31)

Is there a glut of saving?
2005.08.04 | Comments (13)

The Conundrum Question
2005.07.04 | Comments (5)

What's Behind the Interest Rate Condundrum?
2005.06.14 | Comments (44)

China Does Not Determine U.S. Interest Rates
2005.06.03 | Comments (17)

Have We Saved Enough?
2005.05.19 | Comments (14)

The Myth of the Neutral Interest Rate Policy
2005.02.08 | Comments (4)

The China Factor and the US Dollar
2004.11.30 | Comments (22)

A Nobel Prize for Not Much
2004.10.22 | Comments (15)

Money AMS Display Weakness
2004.09.24 | Comments (7)

The Subsistence Fund
2004.08.25 | Comments (10)

The Myth of Shock-Free Monetary Policy
2004.07.07 | Comments (4)

The Fed Cannot Fix Itself
2004.06.02 | Comments (6)

China: Soft Landing or Bust?
2004.05.26 | Comments (3)

How Healthy are the Banks?
2004.03.29 | Comments (6)

Unusual Revenue Fall
2004.03.28 | Comments (0)

Who Made the Fannie and Freddie Threat?
2004.03.05 | Comments (3)

Running on Empty
2004.02.17 | Comments (7)

Government Spending: Deviation from Trend
2004.02.09 | Comments (1)