Central Banking

Friday, November 2nd, 2018

Monetary policy has changed significantly in the last decade. How should the Fed move forward?

Thursday, November 1st, 2018

When considering why central bankers do what they do, we often focus on their intentions or motivations. Instead, we should look for patterns of behavior that have adaptive value within the context central banking.

Monday, October 29th, 2018

A new NBER working paper considers how actions in the federal funds market affect stock prices and trade volume.

Thursday, October 25th, 2018

Bagehot’s rules are ultimately geared toward assisting illiquid financial organizations but allowing insolvent ones to fail. The Fed went out of its way to support insolvent organizations.

Monday, October 15th, 2018

Under ideal conditions, stablecoins would come to exist due to pure market demand rather than as a reflection of the regulatory climate that has limited access to conventional banking services.

Friday, September 28th, 2018

Despite recent events in Venezuela, hyperinflation has become increasingly rare.

Wednesday, September 19th, 2018

The most well-known of the movies on the 2008 financial crisis is also the weakest. On the other hand, there are two wonderful films about it that deal with both the difficult times for traders and the underlying causes. 

Wednesday, September 12th, 2018

"Presidential attempts to influence the Fed did not start with, and will not end with, the current Chief Executive." ~ Pete Earle

Tuesday, September 4th, 2018

Financial privacy does not get much attention from central bankers. But questions about privacy are becoming increasingly important.

Wednesday, August 29th, 2018

Should it be the business of any central bank to be targeting or setting interest rates, or should this be the business of the market forces of supply and demand, as with any other price in the economy?

Tuesday, August 28th, 2018

A new proposal would have the Federal Reserve provide interest-paying no-fee deposit accounts to the public.

Thursday, August 16th, 2018

The promise of the central bankers to act as the caretaker of the nation’s money is a great illusion. Even more preposterous is the claim of the central bankers that they could keep the economy on the path of a low-inflation economic growth path.

Friday, July 27th, 2018

Central bankers need not merely be alert to market disequilibria. They must foretell, without the proper information, how the whole market will react to new conditions.

Thursday, July 26th, 2018

Why did the Federal Reserve move from a corridor to a floor system in 2008?

Wednesday, July 11th, 2018

Discretionary central banking has had its day. It’s time to insist on lawful money.

Thursday, July 5th, 2018

The knowledge required to maintain monetary equilibrium is tacit and dispersed. No centralized monetary system, no matter how smart or well-intentioned its leaders, has access to that knowledge.

Friday, June 29th, 2018

Trump’s trade war is heating up. What should central banks do to ensure their economies aren’t damaged too much?

Wednesday, June 27th, 2018

The Fed must abandon its traditional policy lever — open-market operations — in favor of managing the interest it pays on reserves if it is to hit its FFR target while operating in a floor system.

Monday, June 25th, 2018

The Fed has a lot of policy tools, to be sure. But, traditionally — that is, when the Fed was operating in a corridor system — it exerted influence on the FFR primarily through its open-market operations.

Wednesday, June 20th, 2018

A recent NBER working paper studies what shapes Federal Open Market Committee member opinions.