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.


Is Inflation Above the Fed’s Target?

“A credible Fed would anchor expectations to its target growth path. Unfortunately, the Fed has not been credible in the past. That leaves us with a much more difficult question today: what should the Fed do when it hasn’t done what it should have done?” ~ William J. Luther

The Federal Reserve Is Not Credible

“Having persistently undershot its inflation target for nearly a decade, the Fed now looks poised to err in the opposite direction.” ~ William J. Luther

Fast Payments Enable Lightning Kidnappings in Brazil

“The only way that the Banco Central do Brasil could completely end PIX-based lightning kidnapping would be to slow the entire system down. That would mean cutting regular Brazilians off completely from the benefits of real-time payments.” ~ J.P. Koning

Coin Can’t Save US from Debt Crisis

“If Treasury can just slap a figure on a hunk of metal and demand that the Federal Reserve credit its account with that figure, it could force the creation of as much money as the politicians controlling it want.” ~ Robert E. Wright

What Is Money, Anyway?

“Rather than it being evil, it should deserve respect since it lays claim to the production of goods and services that do not yet exist. Even more boldly, when earned non-fraudulently, money represents a debt society owes you.” ~ David Gillette

Trouble Transacting with Bitcoin

“Problems with bitcoin’s design––including its suboptimal supply constraint and limited transactions capacity––cast doubt on the claim that bitcoin is superior to the monies widely used at present.” ~ William J. Luther