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

Lift Your Gaze, Please: the April Inflation Overshoot is Not the Problem

Joakim Book May 18, 2021

“A betting man, if he wants to remain a betting man, updates his priors. So, I side with Jason Bloom at the asset manager Invesco: ‘There is so much dislocation in the economy from the reopening and base effects from a year ago that it will take at least six to 12 months before we get a clear view of the underlying inflation trend.’ I will make a different sort of prediction, though: no matter what the future holds, the Chickens will be there to squawk about it.” ~ Joakim Book

Monetary Inflation’s Game of Hide-and-Seek

Richard M. Ebeling May 18, 2021

“Whether the CPI records a higher or a lower rate of general price inflation, the more deleterious effects resulting from monetary inflation are those relative price and wage distortions, and resource, labor and capital misallocations and misdirection, that are hidden beneath the ‘surface’ of the general price level, but nonetheless set in motion the phases and consequences of the business cycle.” ~ Richard M. Ebeling

War Of Words Over Inflation Stirs Questions for the Fed

Judy Shelton May 15, 2021

“Does it make sense, for a nation founded on the notion of individual liberty, equality under the law, and personal property rights, to allow a government agency to manipulate the value of the currency used by its citizens? Would it be better to have a stable monetary foundation to facilitate free-market outcomes, rather than empower the Federal Reserve to distort interest rates and dilute dollars in the service of government policy?” ~ Judy Shelton

Monetary Control: Central Banks Today

Alexander W. Salter May 13, 2021

“The Fed’s operating framework systematically tends towards the abuse of life, liberty, and property. If we want to fix this, we need to take a much closer look at the relationship between money and freedom. Only if we understand this relationship, philosophically, economically, and historically, will we be in a position to fix what’s gone wrong with our monetary institutions.” ~ Alexander W. Salter

Assessing Potential for Higher Inflation

James L. Caton May 12, 2021

“Monetary policy is intentionally supporting fiscal policy and supporting levels of indebtedness from the Federal government that are unprecedented. The result has been an explosion of M2 that increases the risk of inflation. There is a fair chance that policymakers will succeed. But, for the possibility of success, they risk a monetary-fiscal crisis.” ~ James L. Caton