The Fed’s Confusing New Tools (Video)

– February 13, 2020

Preparing for my appearance on Boom Bust this week, I found essays from the Sound Money Project to be invaluable. These economists understand the mechanics of Fed policy extremely well, and write about it in real time at Reading these essays …


The Overnight Lending Intervention That Wasn’t

– February 8, 2020

Recent intervention in the overnight lending market is not precisely an intervention. In some ways, it is a dis-intervention. Viewed in terms of the net effect of activity by the Federal Reserve, the recent accumulation of repurchase agreements has onl …


Federal Reserve as Risk Regulator: An Impossible Task

– February 7, 2020

How big are the costs of various possible regulations applied to leveraged loans? No one knows. The balancing act of simply regulating leveraged loans requires knowledge that simply is not available to the Federal Reserve Board.


Macroeconomic Inferences and the New Fed Regime

– January 23, 2020

Under what conditions can we make valid inferences about the state of the economy from macroeconomic data? As it turns out, this seemingly unproblematic procedure becomes difficult when policy makers have got their eye on the data, too. This applies to …


Winner, Winner Chicken Dinner

– January 16, 2020

The latest consumer price index report marks the end of a nearly seven-year bet with my dissertation advisor — a bet that I have officially won.


The Effect of Data Lags on Monetary Policy

– January 14, 2020

Recognizing the existence of these lags does not imply that the Fed is incapable of reducing the depth and duration of recessions. However, it should instill a sense of humility in those of us considering what the Fed might accomplish in practice.


In Argentina, Inflation Is Still a Monetary Phenomenon

– January 9, 2020

If there is a lesson to be learned from the Argentinian experience, it is that one should never underestimate people’s willingness and capacity to rationalize alternative, but clearly wrong, explanations of well-known problems like inflation.


What Is the Relationship Between Monetary Policy and Fiscal Policy?

– January 5, 2020

Hydraulic Keynesianism is now usually found in the comparatively unsophisticated realm of the popular press.


The Hobbit Teaches that We Can’t Eat Money

– January 4, 2020

There are a lot of good economic lessons to be learned from popular culture. Perhaps that’s not surprising, as the subject matter of economics is ingrained in our very humanity and movies and the arts reflect aspects of human life. By chance alone, som …

Eye of State and Toe of Frog

Monetary Policy: Seeing Like a State

– December 27, 2019

If monetary policymakers actually wish to contribute to the public welfare, they need to stop seeing like a state.


The End of Traditional Monetary Policy

– December 27, 2019

Last June, the FRED Blog identified something that has emerged in discussions I have had with other macroeconomists: the standard macroeconomics textbook no longer adequately explains monetary policy at the Federal Reserve.  Before the crisis in t …


What Is Money? It’s All About Liquidity

– December 24, 2019

When I give my sister a nonfiction book for Christmas, neither of us presumes that she’ll use it in payments for food, rent, clothes, travel, or something else that she desires. Indeed, you’d be hard pressed to find anybody who’d accept a 300 …