The Sound Money Project was founded in January 2009 to conduct research and promote awareness about monetary stability and financial privacy. The project is comprised of leading academics and practitioners in money, banking, and macroeconomics. It offers regular commentary and in-depth analysis on monetary policy, alternative monetary systems, financial markets regulation, cryptocurrencies, and the history of monetary and macroeconomic thought. For the latest on sound money issues, subscribe to our working paper series and follow along on Twitter or Facebook.
Advisory Board: Steve H. Hanke, Jerry L. Jordan, Lawrence H. White
Director: William J. Luther
Senior Fellows: Nicolás Cachanosky, Gerald P. Dwyer, Joshua R. Hendrickson, Thomas L. Hogan, Gerald P. O’Driscoll, Jr., Alexander W. Salter
Fellows: James L. Caton, J.P. Koning
Crypto Needs Less Regulation, Not More
“Pushing excessive regulations on the crypto industry is likely to make crypto more risky, not less. Decentralized protocols built on the blockchain are already safer and more transparent than most regulated financial companies.” ~ Thomas L. Hogan
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Aggregate Demand and Aggregate Supply: Keep It Simple, Stupid!
“This simple model is a good first approximation to aggregate economic performance. Economists know this. Unfortunately, they sometimes ignore it for partisan reasons.” ~ Alexander William Salter
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CBDCs: What Can We Learn From Dollarized Countries?
“How much more could FDR have done had he had a CBDC? The risk of a CBDC goes beyond the serious issue of financial privacy.” ~ Nicolás Cachanosky
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Inflation Remains Stubbornly High
“The neutral real interest rate is thought to be around 0.25 percent, suggesting the Fed may need to raise its nominal interest rate target another 175 to 200 basis points just to get to neutral.” ~ William J. Luther
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What Is an FTX?
“The existence of the FTT token combined with the opacity of the relationship between Alameda and FTX is crucial to the story.” ~ Joshua R. Hendrickson
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Economic Growth Doesn’t Cause Inflation. Here’s Why
“It’s important to get the basic economic relationships right when discussing monetary policy. Economic growth isn’t inflationary. Journalists and central bankers should stop saying otherwise.” ~ Alexander William Salter
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Helping Banks Help Themselves: Extended Shareholder Liability
“The best way to reduce systemic risk is to give the risktakers the incentive to economize on risk. An extended liability regime for banking is a simple and elegant way to improve incentives. We should seriously consider it.” ~ Alexander William Salter
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Inflated Hopes and Burst Bubbles
“The Fed’s chief task is to restore its lost credibility. In retrospect, the switch to average inflation targeting was a mistake. It gave the Fed plausible deniability for noisier, less predictable policy.” ~ Alexander William Salter
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The CBDC Tradeoff
“Rather than crowding out the private sector with a CBDC, the government should let a thousand payment mechanisms bloom.” ~ William J. Luther
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Will A Digital Dollar Offer Financial Privacy?
“At some point, a CBDC that fails to provide a high degree of financial privacy will be used to monitor and censor the transactions of one’s political enemies. It is foolish to think otherwise.” ~ William J. Luther
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Against Interest Rate Reductionism
“Monetary policy is about money, not interest rates. Central bankers should stop trying to implement monetary policy by messing with relative prices. There are better measures and more effective transmission mechanisms.” ~ Alexander William Salter
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The Unquestioned Monopoly
“Despite the arguments made against monopoly and the arguments made in favor of competition, there is one monopoly that largely goes unquestioned. I’m referring, of course, to the monopoly over currency issuance.” ~ Joshua R. Hendrickson
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