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. DwyerJoshua R. Hendrickson, Thomas L. Hogan, Gerald P. O’Driscoll, Jr., Alexander W. Salter
Fellows: J.P. Koning

Moral hazard is a fact of life. The Fed should focus on inflation.

– March 23, 2023

“To the shame of two generations of economists-turned-policy-advisors, moral hazard is a fact of life. We don’t need to add permanent dollar depreciation to this mess.” ~ Alexander William Salter


What To Do About Deficits, Debt

– March 15, 2023

“When it comes to fiscal follies, this time is different. Let’s not pass the buck. Instead, let’s make the necessary sacrifices to ensure the long-run integrity of the United States. Let’s plant the trees.” ~ Alexander William Salter


The Fed Isn’t Powerless

– March 10, 2023

“Responsible students of monetary policy must vigorously resist the ‘powerless Fed’ myth. All it does is absolve central bankers of responsibility for what, on the basis of good theory and mounting evidence, is primarily their fault to begin with.” ~ Alexander William Salter


There’s No Such Thing as a Wage-Price Spiral

– March 8, 2023

“The recent uptick in inflation is worrying, and the Fed needs to get a handle on the situation before higher inflation expectations become entrenched. But the Fed doesn’t need to take a sledgehammer to labor markets to ease the economy’s pricing pressures.” ~ Alexander William Salter


Understanding Inflationary Finance

– March 8, 2023

“Providing revenue to the state is one of the reasons (and, perhaps the primary reason) governments worldwide monopolize the issuance of high-powered money.” ~ Bryan Cutsinger


More Interest Rate Hikes Ahead

– March 6, 2023

“Fed officials will likely continue tightening, and to a greater extent than previously projected. Their overreaction will not undo the damage of acting too late. It will make matters worse.” ~ Nicolás Cachanosky


Persistently Pesky Price Pressures

– March 4, 2023

“Although it may be difficult, the Fed must persevere. Elevated aggregate demand remains the best explanation for ongoing inflation. There is no reason for the Fed to ease its policy.” ~ Alexander William Salter


Inflation Surges in January

– February 27, 2023

“How high rates will ultimately go depends on how inflation evolves over the next few months — and how quickly the Fed reacts to restore confidence in its longer term-inflation projections. The January PCEPI release marked a step in the wrong direction.” ~ William J. Luther


Joblessness and the Fed

– February 15, 2023

“Without a symmetric response to deviations from the target, the Fed’s so-called average inflation target will not produce 2 percent inflation on average. Instead, it will tend to produce inflation that exceeds 2 percent. That’s a far cry from price stability.” ~ Alexander William Salter


Is the Debt Ceiling Lunacy?

– February 8, 2023

“Unconstrained politicians are likely to authorize more borrowing than they should. The debt ceiling might provide a useful—if somewhat limited—constraint against excessive borrowing.” ~ William J. Luther


The Tragedy of the Monetary Commons

– February 4, 2023

“While relatively well-functioning governments have managed to find mechanisms that mitigate the problem, it seems unlikely that Argentina and Brazil will be able to prevent a tragedy of the monetary commons given their history of money and fiscal mischief.” ~ Bryan Cutsinger


Supply Constraints and Inflation, Revisited

– February 3, 2023

“The Fed was late to realize nominal spending was surging and failed to correct course promptly when it realized it had made a mistake. Prices are higher today—and will remain permanently higher—as a consequence.” ~ William J. Luther