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Dr. Jeffrey Herbener: Demystifying the Fed

  • Jeffrey Herbener on Mises Weekends

Tags The FedMoney and Banking

10/21/2016Jeffrey M. HerbenerJeff Deist

Even well-read fans of Austrian economics often have a hard time understanding and conceptualizing what the Fed really does. So we asked our good friend Dr. Jeffrey Herbener to join us and make sense of it all. We cover the basic blocking and tackling of central bank mechanics: how commercial bank reserves are created, the difference between the monetary base and the money supply, and how the Fed Funds rate impacts lending and the structure of production. We consider how Austrian business cycle theory describes the distortions created by artificially low interest rates, and how interest rates ought to operate as price signals. Finally, we discuss how early recipients of newly created money and credit benefit in ways that ordinary citizens don't.

This show is a great primer on the Fed from an Austrian perspective.

Note: The views expressed on are not necessarily those of the Mises Institute.
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