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

Is Inflation Below the Fed’s Target? Yes and No.

Thomas L. Hogan June 30, 2021

“Adjusting for oil and auto prices puts the rate of inflation below the Fed’s 2 percent average target rate. Still, high rates of NGDP growth and mounting bank reserves should cause Fed officials to be leery of high inflation going forward.” ~ Thomas L. Hogan

A Conversation on Financial Exclusion and Inclusion

Ethan Yang June 27, 2021

“On this episode of the Authors Corner, Ethan Yang interviews AIER Senior Fellow Robert Wright on his book Financial Exclusion: How Competition can Fix a Broken System. During the interview, Robert discusses major themes in his book, which touch on the importance of the financial system and the damage exclusion has brought on marginalized communities.” ~ AIER

Are Digital Assets Coming of Age?

Colin Lloyd June 27, 2021

“During the intervening five years, much has happened to support the case for digital assets. More legitimacy will be needed to satisfy the institutional investment community, but it is reasonable to conclude that digital assets have finally come of age.” ~ Colin Lloyd

The Decentralization Fetish

William J. Luther June 21, 2021

“We must not merely assume that decentralization is always good and more-decentralized solutions are always better. Instead, we should recognize that it depends on the unique benefits of decentralization and the costs of realizing those benefits relative to more-centralized alternatives.” ~ William J. Luther

Does “Expected Inflation” Explain or Predict Inflation?

Alan Reynolds June 21, 2021

“There might be higher inflation ahead, but neither year-to-year CPI changes, the 2020 lockdowns, or news-based monthly opinion polls about expected inflation provide reliable advance clues about what lies ahead. Meanwhile, the low break-even rate offers a good reason to be skeptical of high inflation forecasts.” ~ Alan Reynolds

Did the Fed Just Raise Interest Rates?

Thomas L. Hogan June 20, 2021

“In the Fed’s current floor system, the rate of IOR is the key tool of monetary policy. If the Fed raised the rate of IOR, then it raised interest rates.” ~ Thomas L. Hogan