Pertinent Category: Sound Money Project

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

Central Banking, Inflation, Monetary Policy

The Fed Isn’t Powerless

Alexander William Salter

– 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

Government, Inflation, Monetary Policy

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

Alexander William Salter

– 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

Financial Markets, Inflation, Monetary Policy

Understanding Inflationary Finance

Bryan Cutsinger

– 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

Financial Markets, Inflation, Monetary Policy

More Interest Rate Hikes Ahead

Nicolás Cachanosky

– 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

Financial Markets, Inflation, Monetary Policy

Persistently Pesky Price Pressures

Alexander William Salter

– 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

Financial Markets, Inflation, Monetary Policy

Inflation Surges in January

William J. Luther

– 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

Government, Monetary Policy, Unemployment

Joblessness and the Fed

Alexander William Salter

– 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

Economic Education, Fiscal Policy, Government

Is the Debt Ceiling Lunacy?

William J. Luther

– 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

Currency, International, Monetary Policy

The Tragedy of the Monetary Commons

Bryan Cutsinger

– 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

Government, Inflation, Monetary Policy

Supply Constraints and Inflation, Revisited

William J. Luther

– 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

Government, Monetary Policy, Regulation

Efforts to Depoliticize the Fed Will Likely Make Matters Worse

Nicolás Cachanosky

– February 3, 2023

“These efforts to increase Congressional oversight are unlikely to depoliticize the Fed. Indeed, they are likely to make matters even worse.” ~ Nicolás Cachanosky

Government, Inflation, Monetary Policy

Should the Fed Stop Tightening?

Alexander William Salter

– February 2, 2023

“The Fed should stay the course. Putting the nail in the inflationary coffin is more important than hyper-calibrating a ‘soft landing.’ But it likely won’t be long before we’re done.” ~ Alexander William Salter