Nick Freiling

My blog & portfolio

Economics

The Fed’s new ‘regime-based’ concept

From a new paper by St. Louis Fed President James Bullard: The Federal Reserve Bank of St. Louis is changing its characterization of the U.S. macroeconomic and monetary policy outlook. An older narrative that the Bank has been using since the financial crisis ended has now likely outlived its usefulness, and so it is being replaced by a […]

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Why interest rates matter

Some context: I find that almost no one understands what interest rates are and what the Federal Reserve did last week when it “left rates unchanged.” But interest rates are important. Below is my brief, basic explanation of what interest rates are, what the Federal Reserve is doing when they set interest rates, and why […]

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“Single-payer” cognitive dissonance

A telling chart from The AP (via The Atlantic). Many Americans who support single-payer healthcare like the idea of single-payer healthcare, but not the associated trade-offs. I will grant, though, that four of the five points above aren’t really fair because most supporters of single-payer healthcare, I think, have in mind a single-payer system that […]

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Dehomogenizing deflation

From Selgin, Lastrapes, and White: The postwar eradication of deflation would count among the Fed’s achievements were deflation always a bad thing. But is it? Many economists appear to assume so. But a contrasting view, supported by a number of recent studies, holds that deflation may be either harmful or benign depending on its underlying […]

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Falling LFPR isn’t a huge deal

LFPR is low. That’s all over the news these days. Mostly just conservative pundits trying to downplay the economic recovery. Now, there are good reasons to downplay the recovery. Zero percent interest rates for 80+ months with no end in sight—that’s a much better reason. But that aside, the low (and even falling) LFPR alone just […]

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On Pope Francis, think deeper

Pro-market Christians in America could learn much from Pope Francis about holy living and compassionate thinking if only they’d think more deeply about his message. Instead, they’re too quick to extract superficial, tangential inferences about what his teaching means for the cause of free market capitalism. Indeed, advancing free markets is no end in itself […]

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Hayek on competition and discovery

From F.A. Hayek’s Competition as a Discovery Procedure: I should like to begin with the observation that market theory often prevents access to a true understanding of competition by proceeding from the assumption of a “given” quantity of scarce goods. Which goods are scarce, however, or which things are goods, or how scarce or valuable […]

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Are Americans generally wealthier than Brits?

From Fraser Nelson at The Spectator: That fits our general idea of America: a country where the richest do best while the poorest are left to hang. The figures just don’t support this. As the below chart shows, middle-earning Americans are better-off than Brits. Even lower-income Americans, those at the bottom 20 per cent, are better-off […]

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Imagination, boldness, and modeling human choice

Israel Kirzner on entrepreneurial discovery: For neoclassical theory the only way human choice can be rendered analytically tractable, is for it to be modeled as if it were not made in open-ended fashion, as if there was no scope for qualities such as imagination and boldness. Even though standard neoclassical theory certainly deals extensively with decision-making under (Knightian) risk, this […]

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Larry White on lowering long-term risk

I’m taking Larry White’s Monetary Theory and Policy class this fall at George Mason University. Here’s a selection from his book, The Theory of Monetary Institutions on one interesting utilitarian argument for adhering to a gold standard. A more reliable unit of account lowers the risk of long-term nominal contracts, as we have just noted with respect to […]

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