Topic: Monetary Policy

Central Banking, Financial Markets, Inflation, Monetary Policy

Despite Fed Asset Purchases, Lending Remains Depressed

– December 2, 2021

“The Fed’s recent asset purchases appear to have significantly expanded the money supply. But given the small changes in bank lending, it is not clear what their overall effects will be on inflation and the economy.” ~ Thomas L. Hogan

Economic Education, Inflation, Monetary Policy

Three Common Myths About Money and Inflation

– November 20, 2021

“If we oversimplify inflation, we won’t know how to fight it, or whether we should fight it at all. Political responses to economic turmoil are bad enough without the additional complication of widespread misperceptions amongst the public.” ~ Alexander William Salter

Economic Education, Inflation, Monetary Policy

What Does ‘Transitory Inflation’ Really Mean?

– October 29, 2021

“Whether the Fed will conduct policy to render the recent episode of inflation transitory in either sense of the term remains to be seen. My view, informed by market expectations, is that the rate of inflation will eventually decline to something in the neighborhood of 2 percent.” ~ William J. Luther

Crisis, Financial Markets, Government, Monetary Policy

Crowding Out Under Quantitative Easing

– October 27, 2021

“The data speaks loudly. An accommodative monetary policy has failed to facilitate a robust economic recovery. And an artificially low federal funds rate is pumping up the federal debt and weighing on private investment.” ~ James L. Caton

Books, Economic Education, Monetary Policy

Limited Government and Money: A Review of Money and the Rule of Law

– October 26, 2021

“Truly limited government involves limiting the discretion of the Federal Reserve. A solution involves imposing binding rules on both the Fed and Congress. The rules must specifically restrict the creation of ‘liquidity and credit except in specific ways that are general, predictable, and robust.'” ~ Daniel Sutter

Economic Education, Fiscal Policy, Government, Monetary Policy

In Defense of Bank Deposits: An Open Letter to Professor Omarova

– October 16, 2021

“I can’t help thinking that someone placed in charge of a quarter of the nation’s banks ought to recognize the valuable services they perform, and recognize them well enough to be willing to oppose any plan that would prevent them from continuing to perform those services.” ~ George Selgin

Economic Education, Inflation, Monetary Policy

Inflation and Consumer Welfare: Don’t Forget the Supply Side!

– October 15, 2021

“Let’s keep our eye on the supply side. We should be making every effort, policy-wise, to ease restrictions on production and exchange. That will help both in the short run and the long run.” ~ Alexander W. Salter

Economic History, Government, Monetary Policy

Money and the Constitution

– October 15, 2021

“The dubious constitutionality of the Federal Reserve System set up in 1912 might have been overlooked if it had provided price stability, lower unemployment, or enhanced economic growth.” ~ Robert F. Mulligan

Economic Education, Financial Markets, Inflation, Monetary Policy

Assessing Market Expectations of Inflation

– October 13, 2021

“Those denying any risk that inflation will remain above target or confidently predicting that 4 percent inflation will be the new normal, are not within the range of reasonable. They are rightly ridiculed.” ~ William J. Luther

Central Banking, Fiscal Policy, Inflation, Monetary Policy

Is Larry Summers Channeling Benjamin Anderson?

– October 13, 2021

“The post-2008 framework has incentivized the destabilization of monetary policy. The sooner we recognize this fact, the sooner we can seriously discuss a solution to the problem.” ~ James L. Caton

Authoritarianism, Economic Education, Government, Monetary Policy

End Banking as We Know It?

– October 10, 2021

“Omarova is right to point out the deficiencies in central banking. Nonetheless, ending traditional banking to fix central banking would be like closing schools to improve student retention. There are easier ways forward.” ~ Kenneth Kalczuk

Central Banking, Inflation, Monetary Policy

Is Inflation Above the Fed’s Target?

– October 7, 2021

“A credible Fed would anchor expectations to its target growth path. Unfortunately, the Fed has not been credible in the past. That leaves us with a much more difficult question today: what should the Fed do when it hasn’t done what it should have done?” ~ William J. Luther