Estimated Reading Time: 5 minutes
The Federal Reserve System manages the US’s money supply, increasing or decreasing bank credit and other circulating media to reach a target interest rate usually announced at meetings of the Open Market Committee, which meets eight times a year. They met this week, announcing the first of several modest increases in the federal funds rate. […]
Estimated Reading Time: 4 minutes
Hyman P. Minsky (1919-1996) sought to formalize Keynes’s view of the animal spirits of the market through his Financial Instability Hypothesis (FIH), which classifies business enterprises by debt level. Well-run firms only borrow when they expect operating revenue to cover the full cost of borrowing, including both interest and repayment of the principal. Minsky called […]
Estimated Reading Time: 7 minutes
After the 2007-2009 financial crisis, the Great Recession it precipitated, the exceptionally sluggish recovery, and now the pandemic recession, the U.S. has essentially entered a new macroeconomic environment. For most of the 2010s, there was a general consensus that inflation was not too much of a problem. This very complacency has now set the stage […]