Central Banking

Wednesday, April 24th, 2019

The long history of central banking, and especially over the last 100 years of paper monies and out-of-control government deficit spending partly funded by “monetization” of the debt, has more than clearly demonstrated that the epoch of modern central banking needs to come to an end.

Thursday, April 11th, 2019

The president’s decisions to nominate Stephen Moore and Herman Cain leave a lot to be desired. But that is no excuse for perpetuating the myth that the Fed has been independent up until now.

Friday, April 5th, 2019

There is growing support for the idea that meddling with market interest rates is a bad idea. Interest rates coordinate intertemporal production plans, and any attempt to alter them will entail undesirable unintended consequences. 

Thursday, April 4th, 2019

Government expenditures can be funded by increasing reserves at the Federal Reserve. But limits on the demand for reserves mean inflation will follow.

Tuesday, April 2nd, 2019

Some scholars argue that ordinary citizens should be allowed to open bank accounts at the Fed. Is this the best way to reduce financial exclusion?

Friday, March 29th, 2019

The problem with Moore is not that he doesn’t have a Ph.D. The problem is that he is less like Alan Greenspan, and more like Arthur Burns.

Monday, March 25th, 2019

The Fed could be much better than it is. But it could also be much worse. Adding Stephen Moore to the Board of Governors would be a step in the wrong direction.

Friday, March 15th, 2019

Control over money is the legal privilege of the monetary authority. But the monetary authority is not above reproach.

Tuesday, March 12th, 2019

The Fed has a monopoly on the creation of base money, the fundamental asset underlying the banking and financial system. And over decades, with each instance of financial turbulence, the Fed has become less constrained in how, when, and why it creates base money.

Tuesday, March 5th, 2019

The Great Recession of the 2000s shaped a generation of macro- and monetary economists. We can debate the details. But three things warrant widespread agreement.

Thursday, February 14th, 2019

Central banking should be boring. Surprises in the stance of monetary policy are almost always a bad thing. The best thing a central bank can do to achieve macroeconomic stability is to be very open about its future intended policies.

Monday, January 21st, 2019

Chairman Powell's track record suggests that he has a grasp on fundamentals and that he is dedicated to reversing a decade of monetary imbalance.

Tuesday, January 15th, 2019

That one set of payments providers gets access to the core payments system while another is shut out seems quite arbitrary.

Thursday, January 10th, 2019

While it is appropriate for monetary policy to be removed from active political interference, it does not follow that monetary policy ought not be judged according to democratic standards.

Wednesday, January 9th, 2019

Interest rate manipulations by central banks through monetary policy are similar to price controls on other goods.

Monday, December 31st, 2018

European payments just got a whole lot faster. But faster speeds come at a cost.

Friday, December 28th, 2018

The Fed’s failure to shrink its balance sheet and commitment to paying above-market interest on reserves could undermine its ability to combat the next recession.

Wednesday, December 19th, 2018

Edward Stringham appeared on Yahoo Finance ahead of major rate decisions by the Fed

Tuesday, December 4th, 2018

President Trump violated long-standing norms with his swipes at the Fed. But the notion that his predecessors kept their noses out of the Fed’s business is largely a myth.

Sunday, December 2nd, 2018

Wouldn’t the world fall apart? Not at all. I predict that the news would be front page for the usual 48-hour news cycle and then the world would move on. No big deal. There is no downside. And a huge upside. All it requires is some political courage.