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
Permanent or Transitory Inflation: An Analytical Framework
“Inflation is not a high price level; it is a persistent increase in the price level. Whether inflation persists depends on what Fed officials do next.” ~ Nicolás Cachanosky
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How Does the Federal Reserve Evaluate Policy?
“If inflation does not relent in approaching months, this call for a modest tightening will likely develop support from other ranking members of the Fed. I’m willing to bet that support for tightening will be strongly correlated with the value of the loss function presented here.” ~ James L. Caton
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The Great Inflation Debate Is Missing Why Inflation Matters
“The public debate over inflation is a great opportunity to focus on what really matters: subjecting monetary policymakers to the rule of law. Unfortunately, we’re currently squandering that opportunity to repeat pop-macroeconomic fallacies.” ~ Alexander W. Salter
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Decentralized Stablecoins: The Real Peer-to-Peer Electronic Cash Systems
“Bitcoin still has a role to play as a globally popular speculative token. It’s time for the decentralized stablecoins to take their place as the real peer-to-peer electronic cash systems.” ~ J.P. Koning
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The End of Bretton Woods, Jacques Rueff, and the “Monetary Sin of the West”
“As its contemporary critics understood, Bretton Woods was doomed to fail if it could not be fundamentally reformed. One of its chief contemporary critics was the French economist, Jacques Rueff.” ~ Lawrence H. White
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How High Will Inflation Be in 2021?
“Inflation will be noticeably higher in 2021 than it has been in some time. An important question is whether it will be followed by the widely predicted lower inflation or by higher inflation in subsequent years.” ~ Gerald P. Dwyer
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How Tether Can Improve Its Pie Chart
“Tether will be publishing its next pie chart sometime in the middle of August. Given its flagging issuance, Tether has every reason to do a better job than before. The whole cryptocurrency world will be watching.” ~ J.P. Koning
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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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