Banks are merely financial intermediaries that don’t use money as a medium of exchange for buying anything that contributes to GDP.  If local banks save money at the central bank (the Fed in the US), it is merely the local…

 Lasse Lien posted a simple story about how a change in the money supply can reduce transactions costs and eliminate debt.  When the money supply increases, the circular flow of money tends to speed up. A rich tourist came to…

A recession can either be caused by a lack of supply or a lack of demand.  A lack of supply could be caused by a drought reducing agricultural output or a war reducing the productive capacity to supply goods and…

I assign some Paul Krugman readings in my Macroeconomics class and because he is such a polarizing character, some people on both the right and the left seem to think he is just a blowhard.  If you are one of…