Monetary Policy

Monetary Policy

Research

David Beckworth | Jun 15, 2016
Visiting Scholar David Beckworth demonstrates that poor monetary policy set by the European Central Bank (ECB) played a key role in the two recessions, sparked the sovereign debt crisis experienced by several Eurozone countries, and exacerbated the impact of the austerity programs.
Scott Sumner | Mar 2016
There is a great deal of academic research suggesting that monetary policy should use a rules-based approach (e.g., Kydland and Prescott 1977, McCallum 1985, Plosser 2014). However, Fed officials have generally been opposed to any sort of rigid policy rule.
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.

Testimony & Comments

Expert Commentary

May 13, 2016

Although it's been a few years since the most recent increase, the $15 proposals cannot simply be written off as a cost-of-living adjustment, as the consumer price index is up only some 11 percent since the previous increase.
May 11, 2016

The Mercatus Center at George Mason University is pleased to announce David Beckworth will join as a senior research fellow with the Program on Monetary Policy, starting July 1st, 2016.
Mar 14, 2016

The Fed is a monetary superpower, affecting monetary conditions across the globe. It needs to better recognize this role and act now with decisive easing.
By David Beckworth, Ramesh Ponnuru |
Feb 08, 2016

Bold theses should receive skeptical reactions, and ours did. We argued in the New York Times that, contrary to what just about everyone believes, the financial crisis and the Great Recession that blew up the American economy in 2008 were not the necessary consequences of a housing bust.
Feb 04, 2016

See if this sounds familiar. The economy is in a deep slump. The Fed cuts interest rates close to zero and then tries quantitative easing (QE). A banking crisis begins in the United States and then spreads to Europe, where even sovereign debt is no longer safe. Individual countries are locked into a single monetary regime and unable to stimulate their economies. Am I my describing the Great Recession? Yes, but I’m also describing the Great Depression of the early 1930s. Now let’s push the comparison a bit further.
Jan 14, 2016

The Fed began a new chapter in its history in December by raising interest rates for the first time in almost a decade. A key reason for this historic liftoff of interest rates is the belief by Fed Chair Janet Yellen and other monetary officials that the "natural" interest rate has risen and the Fed must follow suit. So what is this mysterious natural interest rate, and why must the Fed follow it?

Experts

Podcasts

David Beckworth | July 18, 2016
Robert Hall, professor of economics at Stanford University and senior fellow at the Hoover Institution, has written on macroeconomic issues since the 1960s. Bob is also the chairman of the National Bureau of Economic Research’s Committee on Business Cycle Dating, which maintains the chronology of U.S. business cycles. He joins the show to discuss the difficulties of measuring gross domestic product and dating the beginning and end of recessions. David and Bob also talk about the pros and cons of nominal GDP targeting and price level targeting. Finally, Bob shares his thoughts on why our economy has performed so lethargically since the Great Recession.

Recent Events

Please join the Mercatus Center’s Program on Monetary Policy Director Scott Sumner, and Visiting Scholar David Beckworth, for an in-depth discussion on the Federal Reserve. Just a week after Federal Reserve Chair Janet Yellen’s Congressional testimony, Mercatus scholars will analyze current Federal Reserve policy (like the December rate hike), and lead an informative discussion on the future of monetary policy.

Books

Jerry Brito, Andrea Castillo | May 03, 2016
As the world’s first decentralized digital currency, Bitcoin has the potential to revolutionize online payment systems and commerce in ways that benefit both consumers and businesses. Individuals can now avoid using an intermediary such as PayPal or submitting credit card information to a third party for verification—both of which often involve transaction fees, restrictions, and security risks—and instead use bitcoins to pay each other directly for goods or services.

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.
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