Topic: Monetary Policy

Economic Education, Economic Theory, Monetary Policy

Lessons from the Phillips Curve

– March 29, 2023

“The exploration of the Phillips Curve has taken many different paths and yet somehow ended up in the same place. The world could have been spared much of this meandering with a more firm grounding in what theory does and does not tell us.” ~ Joshua R. Hendrickson

Economic History, Fiscal Policy, Inflation, Monetary Policy

Monetary Policy and that Old-Time Fiscal Religion

– March 26, 2023

“Nominal income targeting can potentially restore the old-time fiscal religion. Like the classical gold standard, this approach stabilizes total spending in the economy, rendering counter-cyclical fiscal policy unnecessary and ineffective.” ~ Bryan P. Cutsinger & Louis Rouanet

Government, Inflation, Monetary Policy

Money and Inflation Are Still Related

– March 26, 2023

“M2 in 2020 and 2021 increased by the largest percentages in the last 60 years. To the surprise of the Federal Reserve (although not everyone), inflation resulted.” ~ John Devereux & Gerald P. Dwyer

Crisis, Financial Markets, Inflation, Monetary Policy

Fed Raises Rate, But Signals Potential Pause in May

– March 23, 2023

“In 2021 they were looking for help from recovering supply chains. Now, they are looking for help from tight financial markets. It’s time FOMC members help themselves — or, God help us all.” ~ William J. Luther

Financial Markets, Media, Monetary Policy

Words & Numbers: Peter C. Earle On The Death of Silicon Valley Bank

– March 23, 2023

“Peter C. Earle, AIER Research Faculty and former Wall Street trader, joins AIER Senior Editor James Harrigan and Antony Davies on the Words & Numbers podcast to talk about what happened to Silicon Valley Bank.” ~ AIER

Government, Inflation, Monetary Policy

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

Financial Markets, Fiscal Policy, Government, Monetary Policy

Is it a LOLR? No, It’s a Trap

– March 20, 2023

“The reason this is infuriating is that we are being told that taxpayers should be willing to double down, to reimburse even-more-careless depositors for their negligent inattention to risk.” ~ Michael C. Munger

Crisis, Financial Markets, Fiscal Policy, Monetary Policy

Silicon Valley Bank: Bespoke, Woke, and Restoked?

– March 13, 2023

“In a chorus which has become familiar, the S&P 500 futures just leapt upward, as the dollar fell with equal fervor. Relief for equities, a snub to the greenback. At 7:45pm EDT on an otherwise quiet Sunday night in March, this is what that kicking the can down the road looks like.” ~ Peter C. Earle

Crisis, Financial Markets, Monetary Policy

Has the Discount Window Mystery been Solved?

– March 10, 2023

“We won’t know for another twelve or fourteen months whether Silicon Valley Bank (or any of the other banks being thrown overboard today) were the ones borrowing at the Fed’s discount window. But it is increasingly likely that whatever firm(s) it was, exigency was the driver.” ~ Peter C. Earle

Central Banking, Inflation, Monetary Policy

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

Government, Inflation, Monetary Policy

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

Financial Markets, Inflation, Monetary Policy

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