The fed funds rate was never the Fed's actual policy lever

The fed funds rate was never the Fed's actual policy lever

| convenience yield, federal funds rate, Federal Reserve, market monetarism, moneyness, Nick Rowe, nominal interest rates

The lever on which a central bank pushes or pulls in order to keep its target variable (say inflation) on track is commonly referred to as t...

Google as monetary superpower — a parable

Google as monetary superpower — a parable

| Federal Reserve, hot potato effect, liquidity premium, moneyness, nominal interest rates, open market operations, quantitative easing, quantity theory of money, stock market and equities

In trying to understand how modern monetary policy works, I find it useful to create parables, or alternate monetary worlds, and put them th...

Transporting the macroblogosphere back to 1809: Usury Laws and the 5% upper bound

Transporting the macroblogosphere back to 1809: Usury Laws and the 5% upper bound

| Bank of England, forward guidance, Henry Thornton, history of thought, inflation, Miles Kimball, Nick Rowe, nominal interest rates, Paul Krugman, real interest rate, usury, zero lower bound

The zero-lower bound is the well-known 0% floor that a note-issuing bank hits whenever it attempts to reduce the interest rate it offers on ...