politicalfed

The Fed Is Hereby Exposed as Wholly Political

– June 11, 2019

If there is a bright spot to the tariff war, it’s that the Fed has definitively exposed itself as a political body, less interested in economic growth than serving the interests of power.

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Powell’s New Monetary Regime

– June 7, 2019

Fed Chair Jerome Powell has suggested that Federal Reserve policy might not tighten as much as anticipated. He has also changed the regime that dominated the last decade of monetary policy.

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Monetary Policy and Constrained Discretion

– June 5, 2019

The problem with constrained discretion is that it leaves up to central bankers the decision when to switch from rule-like behavior to discretionary behavior.

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Inflation Targeting in Argentina: What Went Wrong?

– May 31, 2019

To reduce inflation and keep the Argentine peso stable going forward, the Macri administration adopted an inflation-targeting regime. But, just 26 months after its implementation in September 2016, the inflation-targeting regime had failed. What went wrong?

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dollarclamp

Did Tight Monetary Policy Result in a Sluggish Recovery?

– May 15, 2019

Some claim that, over the last decade, tight monetary policy slowed down what would otherwise have been a rather speedy recovery. Can that possibly be right?

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Monetary Policy Rules Are Not Enough

– May 12, 2019

A monetary rule would provide guidance and stability. But monetary rules are not incentive-compatible for monetary policy makers.

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centralbanking

Central Banking Is Central Planning

– April 24, 2019

The long history of central banking, and especially over the last 100 years of paper monies and out-of-control government deficit spending partly funded by “monetization” of the debt, has more than clearly demonstrated that the epoch of modern central banking needs to come to an end.

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Stephen Moore, Herman Cain, and the Myth of Independence

– April 11, 2019

The president’s decisions to nominate Stephen Moore and Herman Cain leave a lot to be desired. But that is no excuse for perpetuating the myth that the Fed has been independent up until now.

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Interest Rates, Funny Money, and Economic Malaise

– April 3, 2019

There is growing support for the idea that meddling with market interest rates is a bad idea. Interest rates coordinate intertemporal production plans, and any attempt to alter them will entail undesirable unintended consequences. 

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Quantitative Easing: A Model for Financing Government Spending?

– April 3, 2019

Government expenditures can be funded by increasing reserves at the Federal Reserve. But limits on the demand for reserves mean inflation will follow.

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MMT Is a Recipe for Revolution

– April 2, 2019

MMT in the colonial period often led to periods of ruinous inflation and, less well-understood, revolution-inducing deflation.

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What Makes Stephen Moore Unqualified?

– March 29, 2019

The problem with Moore is not that he doesn’t have a Ph.D. The problem is that he is less like Alan Greenspan, and more like Arthur Burns.

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