Monetary Policy

Monetary Policy


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.
Jerry Brito, Andrea Castillo | Aug 19, 2013
As the world’s first decentralized digital currency, Bitcoin has the potential to revolutionize online payments systems in a way that benefits individuals and businesses. Instead of using an intermediary such as PayPal or submitting credit card information to a third party for verification—both of which often include transaction fees and other restrictions—Bitcoin allows individuals to pay each other directly for goods or services.
Scott Sumner | Jul 24, 2013
Central banks have recently done a dreadful job of stabilizing the path of nominal expenditures. The adverse demand shock of 2008–9 led to a severe recession in the United States and Europe. Monetary policy could be greatly improved with a regime of “targeting the forecast,” or setting policy so that the expected growth in nominal GDP is equal to the central bank’s target growth rate. This goal could be accomplished by setting up a nominal GDP futures market and then adjusting the monetary base to stabilize nominal GDP futures prices. The market, not central banks, would set the level of the monetary base and short-term interest rates under this sort of policy regime. Modest adjustments in such a regime could address many previous criticisms of futures targeting.

Testimony & Comments

Expert Commentary

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.
Apr 23, 2014

Last week, the Government Accountability Office issued a report on information security lapses at the Securities and Exchange Commission. The report, an elaboration on problems identified in GAO's December 2013 audit report, warned that these problems created risks to "the confidentiality, integrity, and availability of a key financial system" at the SEC. In short, "information security weaknesses placed SEC financial data at risk" and the commission needs to work harder to fix them. That's not a great report card for an agency that is supposed to be keeping tabs on information security in the financial sector.
By Thomas L. Hogan, Linh Le |
Feb 07, 2014

As Ben Bernanke's tenure at the Federal Reserve drew to a close, many wondered how history will remember this controversial chairman. Although he is widely respected as an academic, economists are divided regarding Bernanke's actions during the 2008 financial crisis.
Jan 29, 2014

The Federal Reserve on January 24 issued guidance for "eight domestic bank holding companies that may pose elevated risk to U.S. financial stability." The guidance, which is part of Dodd-Frank resolution planning, is intended to "clarify" expectations for these companies and guide the Federal Reserve staff charged with supervising them. But the fact that such guidance is necessary illustrates what is wrong with our financial system and its regulatory framework.
By Nita Ghei |
Jan 23, 2014

The chorus of optimistic forecasts is growing. The Federal Reserve’s Beige Book reported moderate growth from November to the end of 2013, and that “the economic outlook is positive in most districts.” The World Bank predicted the developed world is on the brink of “self-sustained recovery” for the first time in five years, and expects the U.S economy to grow as much as 3.2 percent this year.


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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