Monetary policy regimes and the real interest rate federal. Destruction of capital, economic resonance, hyperdeflation the daily bell is pleased to present this exclusive interview with antal fekete. Financial crisis dynamics, the shadow gold demand, and. The zerointerest rate bound and optimal monetary policy in a small open economy article pdf available in hitotsubashi journal of economics 452 december 2004 with 34 reads how we measure. He relationship between the federal reserves discount rate and money market interest rates con tinues to be a topic of nuch interest and even more confusion. Decline curve analysis is based on empirical observations of production rate decline, and not on theoretical derivations. Gold, professor fekete and the economic armageddon signal economics great depression ii apr, 2010 04. Professor antal fekete introduced the proposition that a falling interest rate as. The goal is to spur economic activity by encourage lowcost borrowing and greater access to cheap credit by firms and individuals. Ttp is the price at t of a discount bond maturing at t. Pdf the effects of the bank of japans zero interest. Born in budapest, hungary in 1932, he graduated from the.
Fekete, professor, memorial university of newfoundland october 9, 2005. By diderik lund, professor, department of economics, university of oslo. Fekete, professor, memorial university of newfoundland september 16 2005. Discount rate and tax in petroleum activity by diderik lund.
The taylor rule is an interest rate forecasting model invented by famed economist john taylor in 1992 and outlined in his 1993 study, discretion. Pdf the zerointerestrate bound and optimal monetary. The seventh pillar of sound money and credit antal e. Then the propensity to consume appears as the volume, and the discount rate as the marginal productivity of social circulating capital. In the years following the financial crisis, several central banks have turned to zero interestrate policy to aid economic recovery.
December 2008december 2015, a sevenyear period in which. The term quantitative easing qe describes a form of monetary policy used by central banks to increase the supply of money in an economy when the bank interest rate, discount rate andor. Our revisionist theory of the gold standard takes the bill market and the discount rate into full. Gold, professor fekete and the economic armageddon signal. Home gold university financial crisis dynamics, the shadow gold demand, and mene. This work was begun while he was a visiting professor there in 201617. Tokyo professor, a newly appointed policy board member. Fekete professor memorial university of newfoundland email. Attempts to explain the observed behaviour using the theory of flow in porous media lead to the fact that these empirically observed declines are related to boundarydominated flow. There is no discount at all, not for the loss of use of the money in the meantime, not for. If the cash flows being discounted are nominal cash flows i. Here is a graph of the interest rate on the 10year us treasury bond.
New austrian school of economics, mariatheresiastra. The discount rate and market interest rates federal reserve. Fekete, professor, memorial university of newfoundland. Overview of japans monetary policy responses to deflation. Fekete is an author, mathematician, monetary scientist and educator. In recent years through qe quantitative easing and zirp zero interest rate policy the fed has succeeded in bankrupting the entire insurance industry. The new austrian school goes back to carl menger, and applies his method of thinking to monetary science and the rate of interest. In 1844 john fullarton of the banking school described how low interest rates were resisted by savers in selling their gold bonds and hoarding gold instead.
The effects of the bank of japans zero interest rate commitment and quantitative monetary easing on the yield curve. Since fekete s work is not accepted by those austrians there is the need to launch and expand the new austrian school of economics. Henry ford ii professor of economics, yale university. A macrofinance approach subsequently published in the japanese economic re. The effects of the bank of japans zero interest rate commitment and. Professor of economics, university of tokyo formerly, member of the policy. Under zirp insurance companies are deprived of any return to assets with no. The role of interest rate policy in the generation and propagation. Since then a general reduction in interest rates along with a reduction in the.
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