Are you worried about inflation? Don’t be

Last summer, the Fed switched to “average inflation targeting.” The Fed’s main goal is to ensure that the PCE inflation will average around 2% over the long term and that future overshoots will compensate for any short-term discrepancies. Although a starting point is not specified, we can assume that January 2020 is the beginning. Therefore, according […]

NeoFisherian experiment in Turkey: Here we go again

Yesterday Erdogan dismissed the head of the Central Bank of the Republic of Turkey’s, Naci Agbal, and replaced him with professor Sahap Kavcıoglu. In a previous post, I claimed that Turkey has willingly or unwillingly adopted a kind of NeoFisherian policy. In this post, I will discuss this case within the framework of this hypothesis. […]

Money Matters

Note: I originally designed this post as a separate post, but it changed as I continued to write. At one point, I realized that I needed to write the background for the first post of the “Back to Basics” post series, as even in this form there were points left behind that needed to be […]

Back to Basics, Pt. 4: The role of expectations

In the previous post, we examined the Quantity Theory of Money. We have seen that increases in money growth rate lead to high inflation leading to higher speed and lower real money demand. This indicates that when it comes to a rise in the money supply growth rate, in the long run, the price increase will […]