tag:blogger.com,1999:blog-8897997766931633186.post1259056294640413205..comments2024-02-14T03:21:37.506-05:00Comments on Monetary Freedom: Salerno on Market MonetarismBill Woolseyhttp://www.blogger.com/profile/06330232724290161369noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-8897997766931633186.post-74637176177368561122015-03-24T08:31:16.193-04:002015-03-24T08:31:16.193-04:00Here is another post from 2010:
http://monetaryfr...Here is another post from 2010:<br /><br />http://monetaryfreedom-billwoolsey.blogspot.com/2010/05/malinvestment-and-monetary-equilibrium.html<br />Bill Woolseyhttps://www.blogger.com/profile/06330232724290161369noreply@blogger.comtag:blogger.com,1999:blog-8897997766931633186.post-3679047572139807092015-03-23T21:48:29.831-04:002015-03-23T21:48:29.831-04:00This comment has been removed by the author.Bill Woolseyhttps://www.blogger.com/profile/06330232724290161369noreply@blogger.comtag:blogger.com,1999:blog-8897997766931633186.post-50615802581018657732015-03-23T21:39:43.173-04:002015-03-23T21:39:43.173-04:00It is a theme I return to often.
Here is an earli...It is a theme I return to often.<br /><br />Here is an earlier post:<br /><br />http://monetaryfreedom-billwoolsey.blogspot.com/2013/05/another-austrian-critique-of-market.htmlBill Woolseyhttps://www.blogger.com/profile/06330232724290161369noreply@blogger.comtag:blogger.com,1999:blog-8897997766931633186.post-52570257127736777902015-03-23T16:05:54.156-04:002015-03-23T16:05:54.156-04:00The most glaring error is Salerno's claim that...<i>The most glaring error is Salerno's claim that any increase in the quantity of money pushes the market rate below the natural rate of interest because the new money is injected into credit markets. However, an increase in the quantity of money that matches an increase in the demand to hold money rather keeps the market interest rate equal to the natural interest rate. </i><br /><br />Wow... this sentence looks like a big deal to me. I wish I could understand this. Would you be so kind as to elaborate a bit for a noneconomist (who is familiar with Austrian economics) to understand? <br /><br />Can I ask you if you have discussed this more in detail somewhere else? Thank you very muchMauriziohttps://www.blogger.com/profile/00234058781177355541noreply@blogger.comtag:blogger.com,1999:blog-8897997766931633186.post-52543908239042761482015-03-21T07:50:55.254-04:002015-03-21T07:50:55.254-04:00Good point Kevin. Merrill made this point as wel...Good point Kevin. Merrill made this point as well on facebook. Oddly enough, I am guilty of the reverse. I am much more sanguine about the ability of entrepreneurs to ignore temporary fluctuations in short term interest rates than in their ability to adjust all prices and wages to keep the real quantity of money equal to the demand to hold money. Of course, we do have a term structure of interest rates and the possibility of specialization. Don't fund your dam with overnight loans unless you want to make an entrepreneurial judgement about the course of interest rates over the next few decades. Let the specialists decide at what interest rate to buy your 30 year bonds.Bill Woolseyhttps://www.blogger.com/profile/06330232724290161369noreply@blogger.comtag:blogger.com,1999:blog-8897997766931633186.post-66332996513422538172015-03-20T20:59:07.214-04:002015-03-20T20:59:07.214-04:00My question would be why Salerno thinks that entre...My question would be why Salerno thinks that entrepreneurs have a superhuman ability to adjust to disequilibrium price levels but a crippling inability to adjust to a disequilibrium rate of interest. If an overly low rate of interest misleads entrepreneurs, surely price-level disequilibrium does also?<br /><br />And if the amount of nominal spending shouldn't be targeted because it is voluntarily set, well, rates of interest are set voluntarily also. His "refutation" of MM seems to undercut the ABCT.Kevinnoreply@blogger.com