Tag Archives: money

What is helicopter money?

The possibility that central banks might resort to extreme monetary measures, including helicopter money, is much debated in monetary policy circles. But what is “helicopter money”? * In normal times, central banks in developed countries try to control inflation and the level of economic activity by controlling the short term interest rate. But since the… Continue Reading

When bank notes were fun

The ever fascinating blog of the New York Fed tells us that, among the many different types of bank note issued by around 1,600 US banks during the nineteenth century, some included pictures of Santa Claus. Only in 1861 did the Federal Government start issuing paper currency; from that point the Treasury had a monopoly on note… Continue Reading

Cash remains king

Despite the increasing ease of electronic payments, cash remains popular in the UK, according to the Bank of England. * Money is anything that fulfils the three functions of money: i) a means of payment; ii) a unit of account; and iii) a store of wealth. Physical cash does all of these rather well and… Continue Reading

Money, money, money – three different meanings

Money can mean physical cash, or the funds in a bank account or the flows of short term funding used by government and companies. No wonder finance can be confusing. * Finance is a subject bedevilled by jargon – words, phrases and acronyms that are barriers to understanding the relatively simple things that actually go on… Continue Reading

Could we do without physical money?

Physical money is becoming increasingly unnecessary in everyday life. Could it be heading for extinction and does it matter? I’ve just spent three days on holiday in the wonderful city of Copenhagen, using physical cash only once (when the ice cream seller’s card machine was broken, and the ice cream is really good so I couldn’t… Continue Reading

A simple but misleading model of inflation

A lot of hedge fund managers seem to believe that the Fed and other central banks that have been using unconventional monetary policy, specifically “quantitative easing” (see note 1), are dooming us to much higher inflation in future. Some believe the very large increase in central bank balance sheets will cause hyperinflation, economic ruin and… Continue Reading

We are using cookies on our website

Are you happy to accept our analytics cookies, which help us learn about our website visitors and their use of this site? Learn how to disable all cookies.