Growth in the Age of Cheap Capital (April 2013)
This note helps readers understand how corporate management think about and make deliberate choices about their capital structure, depending upon market conditions, discount rates, level of employment in the economy and other factors. A refresher on Modigliani and Miller, and assessment of why companies appear to be doing better yet unemployment remains high.
It Isn’t a Forecast (February 2012)
The Federal Reserve has a dual mandate to both maintain price stability and reasonably full employment at the same time. This differs from that of its counterparts in other countries, which focus primarily on fighting inflation. Because of this, the Fed’s monetary action are often overtly counter-cyclical, raising or lowering interest rates or tightening or loosening money and credit to try to fuel or slow economic growth. Read this note to understand the Fed’s role and reasons for its actions better.
The Store of Value, Under Siege (July 2011) What is money? You might as well ask, “What is time?” It’s one of those concepts we all think we understand until we really examine them. After all, we use money in its various form to buy things every day. But where does it come from? What does it represent? And most important of all, what stands behind our confidence that if we use our money to pay for something, the seller will accept it? This note answers all of those questions, and more.
The Purpose of Monetary Policy (June 2016) As Chair Janet Yellen prepares to review interest rates at the Federal Open Market Committee meeting scheduled for June 2016, Dr. Tiemann reviews the purpose of Monetary Policy. Through the lens of monetary economics, monetary policy is reviewed in the context of the functioning of our banking system, the history, thinking and goals that animate the Fed’s actions.