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
Is Inflation Really a Problem?
“Inflation has real costs when it’s unpredictable. We want monetary institutions to keep generalized price increases on a steady, anticipable path. Since central banks often go out of their way not to be understood, we might have a valid complaint against them after all.” ~ Alexander W. Salter
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Is Inflation Merely Catching Up?
“The price level today is greater than what it was expected to be in the absence of a pandemic and what the Fed implicitly said it would be given its two-percent inflation target. The price level has more than caught up with expectations. The question, now, is whether it will continue to grow so rapidly, remain elevated, or subside.” ~ William J. Luther
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Will Cash Soon Be Obsolete?
“Perhaps these trends will reverse. But it seems more likely that the reports of the forthcoming death of cash have been greatly exaggerated––that is, so long as the government doesn’t kill it.” ~ William J. Luther
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What Do Wildcat Banks Tell Us About Stablecoins?
“The experience in Michigan when it was a frontier state in the same year that the telegraph was invented is not particularly pertinent for discerning the likely success of private currency with the communications technology available today. ‘Wildcat’ is a phrase that has no relevance for stablecoins.” ~ Gerald P Dwyer
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Why is Monetary Policy Focusing on the Overnight Lending Market?
“Borrowing in the overnight lending market allows for the Federal Reserve to access a larger pool of funds from a diversity of financial institutions. As a result, the Fed can borrow these funds at lower rates and avoid attracting negative attention that would be generated by an increase in the interest rate target and the interest rate paid on reserves.” ~ James L. Caton
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Not Smart Financial Regulation
“U.S. financial regulators approved the NSFR despite the fact that their own evidence showed the costs of the rule exceed its benefits. That’s Not Smart Financial Regulation.” ~ Thomas L. Hogan
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A Conversation on Monetary Policy During the Covid Era
“On this episode of the Authors Corner, Ethan Yang interviews AIER Senior Fellow Dr. Tom Hogan on the radical developments that have characterized US monetary policy and the future of money.” ~ AIER
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To CBDC or Not to CBDC?
“The risks of building a US or Canadian CBDC are all worth taking on if the problems that they solve are significant. Unfortunately, some of the problems that CBDC advocates want to target, like the threat of China, aren’t really problems. Others, like the stimulus payments problem, can’t be solved by a CBDC.” ~ J.P. Koning
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Enough About Interest Rates!
“We need to change the public conversation surrounding monetary policy. Talking about the Fed’s activities in terms of interest rates is easy, but deeply flawed. It is better to keep an eye on more relevant variables, like the overall size of the balance sheet.” ~ Alexander William Salter
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Remembering Steve Horwitz
“It is difficult to think about the world getting better and better when dealing with the loss of a friend. But I am sure Steve would continue to insist that it is. Deep down, I know he is right. Indeed, it has never been easier to remember and celebrate the lives of those who have passed away—to watch them, hear them, read their words, or build on their ideas.” ~ William J. Luther
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Is Inflation Below the Fed’s Target? Yes and No.
“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
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The Decentralization Fetish
“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
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