In 2001, the Federal Reserve lowered the federal funds rate target more than it had in over 25 years, but long-term interest rates didn't budge. Has monetary policy become ineffective? Just the opposite, the authors argue. The stability of long-term rates shows that people don't expect inflation...

Contrary to popular belief, federal funds futures rates do not tell us precisely where the market thinks federal funds rates will be in the future. On average, futures rates overpredict future fed funds rates, and, depending on whether fed funds rates are falling or rising, the futures rate may...

Gresham’s law, which says that bad money tends to drive good money out of circulation, may account for many nations’ episodes of money troubles, as far back as ancient Athens. This Commentary discusses the two main explanations for Gresham’s law and suggests some circumstances in which the...

It wasn’t A Beautiful Mind—the book or the movie—that made John Forbes Nash, Jr., famous. It was his work in game theory, a theory that models strategic interactions between people as games. Before Nash, the only games theorists could get a handle on were artificial ones with no real-world...

The need for federal deposit insurance is often based on the claim that it prevents bank runs and makes the banking system more stable. But research shows that banks could prevent bank runs by constructing their deposit contracts appropriately, and, in the absence of deposit insurance, they...

Arbitrage has become associated in popular attitudes with the most ruthless and profit-driven of human impulses, but the opposite reputation might be more well-deserved. The ability to arbitrage is essential for the efficient operation of markets. An interesting application of the principle of...

Economies can’t grow without a sufficiently developed infrastructure, but how deep does the infrastructure have to be to make a difference? The authors take a look at some research from the Fraser Institute that examines the relationship between economic growth and economic infrastructure...