A tough pump to prime

Article Abstract:

The gradual growth of the primary measure of money supply, M2, when the Federal Reserve guided interest rates lowered in 1991, is partially because the Fed regulated, and still regulates, only a small portion of M2. Consequently, M2 is greatly and unpredictably influenced by economic factors beyond the Fed's control. Fed made the portion of M2 under its immediate control grow by 8.0% in 1991. A mere 1.7% growth in the remaining portion of M2 was observed, foiling Fed attempts to achieve its M2 target range.

Economic policy, Interest rates, Monetary policy, Money supply

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Overinvestment in public sector capital

Article Abstract:

A study considers a generally accepted notion that an increased spending on education and infrastructure is beneficial to economic development. However, public investment is required, and more resources should be allocated to investment to achieve economic growth. However, such growth can only be maximized if an equalization of the marginal return rates on alternative capital forms is achieved. Results show the marked differences in the marginal rates of return on different forms of capital.

Infrastructure (Economics), Economic aspects, Investments, Economic development, Education, Public sector, Capital, Public policy (Law)

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