Monetary Policy

Monetary Policy

Research

Jason E. Taylor, Andrea Castillo | Jan 13, 2015
A new study published by the Mercatus Center at George Mason University examines the use of expansionary fiscal policy to stimulate a contracting economy. The study concludes that attempts to use fiscal policy to solve broader economic troubles have failed even by the theory proponents’ own standards. In addition to being poorly timed and targeted, stimulus spending has led to permanent increases in the size and scope of government.
Alexander Salter | Dec 04, 2014
In a new study for the Mercatus Center at George Mason University, scholar Alexander William Salter examines several different proposed rules that the Fed could follow. Salter provides a framework to help policymakers better understand how incentives and information can affect monetary policy and discusses discretion-based and rule-based approaches to monetary policy.
Jeffrey Rogers Hummel | Sep 16, 2014
Many economists and economic commentators fear that the Federal Reserve does not have an adequate exit strategy from the quantitative easing that took place during the financial crisis. Its bloated balance sheet has allegedly left a looming monetary overhang that the Fed will not be able to manage once the economy returns to normal.
David Beckworth | Jul 10, 2014
Inflation targeting emerged in the early 1990s and soon became the dominant monetary-policy regime. It provided a much-needed nominal anchor that had been missing since the collapse of the Bretton Woods system.
Benjamin M. Blau | Oct 24, 2013
This paper analyzes the characteristics of banks that received emergency loans from the Federal Reserve during the recent financial crisis. Using unique data consisting of emergency loan transactions, I provide evidence that larger banks, in terms of assets and market capitalization, were more likely to receive emergency support.
William Luther | Sep 17, 2013
Cryptocurrencies are digital alternatives to traditional government-issued paper monies. Given the current state of technology and skepticism regarding the future purchasing power of existing monies, why have cryptocurrencies failed to gain widespread acceptance?

Testimony & Comments

Expert Commentary

Jun 09, 2015

The popular cryptocurrency Bitcoin is fast approaching a critical technical challenge that will fundamentally shape the course of its future. If unaddressed, an arbitrary protocol quirk implemented by Bitcoin creator Satoshi Nakamoto as a short-term security measure could soon undermine Bitcoin’s scalability, usability, and even its long-term viability—although, as always, opinions differ.
Mar 30, 2015

As the world looks back on Lee's legacy, we should pay special attention to his contributions on responsible and effective governance over a three-decade reign as the city-state's prime minister.
Mar 23, 2015

The dollar’s rise is evidence of the U.S. economy’s strength. But a strong dollar hurts U.S. exports and could be a problem for emerging market economies. Last week the Federal Reserve signaled that it might start raising interest rates later this year, a move that might further strengthen the dollar. Should the Fed be concerned that the strong dollar could slow down the domestic and international economic recovery? The New York Times Room for Debate posed this question, "Should the Fed be concerned that the strong dollar could slow down the domestic and international economic recovery?"
Mar 03, 2015

Bi-partisan proposals to give district presidents a stronger voice in monetary policy deliberations may be more than academic. Addressing Sen. Shelby’s question about such proposals last week, Dr. Yellen observed that the FOMC’s voting structure is “of course, something that Congress could, if it wished, revisit.” Members of Congress interested in effective reforms to the Fed could stand on firm economic ground in doing just that.
Jan 05, 2015

Many people blame the recent financial crisis on a lack of regulation and fraud in the financial system. However, the Federal Reserve appears to have been a significant contributor to the crisis in terms of both its poor monetary policy and faulty regulation of the financial system.
Dec 22, 2014

The Federal Reserve Bank of New York has endured an uncomfortable amount of public scrutiny of late. New York Fed President William Dudley, for example, recently appeared before a less than amicable Senate Banking Committee. One member of that committee, Sen. Jack Reed, D-R.I., would like to require that any future New York Fed presidents appear before the committee as a prerequisite of the job.

Charts

This week’s chart is a re-creation of a chart produced by the Richmond Fed. The share of financial sector liabilities subject to implicit or explicit government protection from losses grew from 45 percent in 1999 to 60 percent in 2013 and amounts to a staggering $26 trillion.

Experts

Podcasts

Scott Sumner | August 13, 2015
China has devalued its currency. Scott Sumner analyzes China’s monetary policy for Tim Farley on POTUS (Sirius XM).

Recent Events

Please join the Mercatus Center for a panel discussion on Federal Reserve reform.

Books

Media Clippings

Benjamin M. Blau | Oct 27, 2013
Benjamin Blau cited at The Washington Examiner.
Benjamin M. Blau | Oct 24, 2013
Benjamin Blau cited at International Business Times.
Jerry Brito | Oct 03, 2013
Jerry Brito cited at The Wall Street Journal.
Jerry Brito | Oct 03, 2013
Jerry Brito cited at Los Angeles Times.
Jerry Brito | Oct 03, 2013
Jerry Brito cited at BBC.
' '