Monetary Economics

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.

Articles

Without Rules, the Fed Rules

Alexander W. Salter September 12, 2023

“Committing to a rule significantly lowers the cost of evaluating Fed policy. And lowering the cost of evaluating Fed policy could make it very clear to a great many people that the Fed is up to no good.” ~ Alexander W. Salter

What’s the Harm in Raising the Inflation Target?

Bryan Cutsinger September 5, 2023

“In addition to increasing workers’ real tax burden, raising the inflation target reduces workers’ real wages by reducing the demand for their labor services.” ~ Bryan Cutsinger

The Floor System Fails

Louis Rouanet September 4, 2023

“During normal times, when inflation is low and stable, the floor system increases the burden on taxpayers. The burden is even larger when inflation is high, as it has been over the past two years.” ~ Louis Rouanet

Why Are Mortgage Rates So High?

Gerald P. Dwyer September 2, 2023

“Interest rates on mortgages were 2.66 percent just two and a half years ago. Why the sudden increase in rates? The Federal Reserve increased the money supply and generated the worst inflation in many years.” ~ Gerald P. Dwyer