Monetary policy influences inflation, employment, and economic activity. A stable but dynamic monetary system is vital for supporting economic growth, individual liberty, and a prosperous society. Therefore, we examine the causes and consequences of monetary policy (including inflation), identify ideal and practical steps towards a better monetary policy regime, and look at monetary alternatives and financial regulation.
“Economic growth means more output. Comparatively less money chases comparatively more goods. All else equal, prices across the economy should fall.” ~Alexander W. Salter
“Although Fed officials were late to tighten monetary policy, their efforts over the last year appear to have worked. The risk today is that monetary policy is too tight—and will remain so for too long.” ~William J. Luther
“The whole reason why it is an advantage for a developing country to tie to a major country is that historically speaking the internal policies of developing countries have been very bad. US policy has been bad, but their policies have been far worse.” ~Nicolás Cachanosky
“Specialization and productivity increase when the market’s size extends across national borders. But tariffs reduce the extent of the market and thereby reduce specialization.” ~Paul Mueller
“Interest rate and liquidity data point to the same conclusion: monetary policy is sufficiently tight. Further tightening could cause a painful economic contraction.” ~Alexander W. Salter
“If core inflation is more or less on track, why are most FOMC members projecting another rate hike?” ~William J. Luther