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: J.P. Koning
“Contrary to McGinty and Patterson, a close look at the evidence reveals that deregulation and competition have, in fact, reduced electricity prices in Texas. Prices in competitive markets have fallen, while those of noncompetitive utilities have increased. Competition has brought both residential and commercial prices down below the national averages.” ~ Thomas L. Hogan
READ MORE“Critiques of mainstream macroeconomics are common among Austrian economists. In a new book, titled Macroeconomics as Systems Theory, Richard Wagner goes further. He starts with Erik Lindahl’s distinction between microeconomics as individual action and macroeconomics as interaction. He then offers a new approach to macroeconomics based on theories of complex systems.” ~ William J. Luther
READ MORE“Many of the public policies that shackle the financial sector are designed to do so, because they help governments accomplish some other political objective. Engaging these political considerations, and how they impinge on banking and finance, is critical if we want to understand the history of monetary institutions, especially in the United States.” ~ Alexander W. Salter
READ MORE“Financial markets indicators suggest that high inflation is not likely. Even with a very large balance sheet, the Fed has proven that it can control inflation by paying high rates of interest on bank reserves. Whether Fed officials choose to do so is the open question.” ~ Thomas L. Hogan
READ MORE“Politicians are quick to ignore the costs of government spending in proposing legislation and obscure those costs by issuing debt rather than raising revenues. It is politically popular to issue debt and send checks to everyone. The benefits of the policy are clear: people get checks. The costs, which ripple out through financial markets as interest rates are bid up, are difficult to tie to the policy.” ~ Nicolás Cachanosky
READ MORE“The Fed’s new lending programs were not very helpful, and they come at a potentially high cost. Insofar as they were designed to allocate credit, as opposed to merely providing liquidity, they amount to an expansion of the Fed’s mandate. And, although the extent of the Fed’s credit allocation was limited this time, it has set a dangerous precedent, which risks subjecting the Fed to even more political influence going forward.” ~ William J. Luther
READ MORE“If the burden of interest payments increases, will Congress make the difficult decisions required to reduce federal spending? What contingency plan do Yellen and Powell have in their back pocket if the dollar suffers a speculative attack owing to an unsound fiscal position? Yellen was right: ‘It’s the type of thing that should keep people awake at night.'” ~ James L. Caton
READ MORE“Efforts to create stability without collateral are ambitious. The evidence that Empty Set Dollar and Dynamic Set Dollar have provided over the last few months suggests they are too ambitious. An algorithmic stablecoin only works so long as its users’ self-referential beliefs persist.” ~ J.P. Koning
READ MORE“Discretionary central banking creates bad incentives. To overcome bad incentives, we must take away the discretion. The Fed, so long as it exists, should follow a rule.” ~ Alexander W. Salter
READ MORE“The rise of MMT on the political left will no doubt continue. It is politically expedient. It provides a justification for spending. Political expediency does not imply theoretical soundness, however. And defenses along the lines offered by Galbraith do little to assuage very real concerns.” ~ Nicolás Cachanosky
READ MORE“I can only imagine that those in charge of monetary policy, following Woodford and the precedent set by Bernanke, see stable implementation of a fixed monetary rule as being an antiquated idea, obviously inferior to their more flexible interpretation of rule-based policy. Their perspective, now widely shared among monetary theorists and policymakers, risks leaving us sleepwalking toward a state of fiscal insolvency.” ~ James L. Caton
READ MORE“What are the implications of the Ripple suit for cryptocurrencies in general? Cryptocurrencies with a framework similar to Ripple’s obviously have a problem. Decentralized cryptocurrencies such as Bitcoin and Ether are far away from the situation creating problems for Ripple.” ~ Gerald P. Dwyer
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