Monetary Policy

Monetary Policy


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?
Scott Sumner | Sep 11, 2013
Many observers have been perplexed by the slow recovery from the 2008 recession. In the United States, Congress passed a nearly $800 billion stimulus in early 2009, yet growth remained sluggish. More recently, a shift toward fiscal austerity does not seem to have noticeably slowed the rate of economic growth.1 This seems to go against the textbook Keynesian model, which says fiscal stimulus has a multiplier effect on GDP; however, we shouldn’t be surprised that fiscal policy seems less effective than anticipated. As we’ll see, fiscal policy ineffectiveness is one byproduct of modern central banking, with its focus on inflation targeting.

Testimony & Comments

Expert Commentary

Dec 18, 2014

How should monetary policy be conducted? What previously was a question of interest only for a subset of economists has exploded into popular debate since the 2008 financial crisis. This, no doubt, is due to the Federal Reserve's unprecedented activities during the crisis.
Nov 17, 2014

Large markets for standardized goods tend to be impersonal. The market's ability to function depends more on the quantity and quality of goods for sale than on who buys the goods. This applies to markets for financial assets too — and it's important to keep in mind when weighing the potential effects of the current volume of U.S. Treasury debt against the impact of the Federal Reserve's decision to end quantitative easing.
Sep 30, 2014

Four decades after Hayek received the Nobel Prize, there are many corners of the world that have yet to absorb his message of humility. To change that, financial regulators and their legislative benefactors should commemorate this two-score anniversary milestone by revisiting Hayek's pioneering work.
Sep 15, 2014

Unless you’re on the receiving end, it’s hard to approve of corporate welfare like government decreed loan guarantees. That principle underlies recent debates my colleague, Veronique de Rugy, has taken part in over the Export-Import Bank’s future.
Jun 09, 2014

As its title suggests, Timothy Geithner’s book, "Stress Test," is stressful reading. The former treasury secretary returns the reader to the terrifying days of the 2007-2009 financial crisis. Those memories on their own are bad enough, but Geithner’s contemporaneous thoughts and words are the really scary part.
Jun 04, 2014

The Fed's first hundred years are over, and it is aggressively planning its second century. It may be willing to trade its independence for additional powers, but Congress must not allow that to happen. If we are to have a central bank, it should focus on monetary stability, refrain from rescuing failing companies, and leave the politicking, fiscal game-playing, and regulating to entities and individuals that don't claim to be independent.


Jerry Brito | August 26, 2013
Jerry Brito discusses Bitcoin on Marketplace.

Recent Events

This program will highlight the key findings from Ms. Peirce and Mr. Greene’s recent public interest comment, Money Market Fund Reform; Amendments to Form PF, and provide specific suggestions for money market fund reform.


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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