Monetary Policy
By minimizing the harm caused by recessions and high inflations, monetary policy can promote economic stability and create an environment in which individuals and businesses prosper and thrive. In pursuit of these goals, Mercatus research shows why and how the Federal Reserve should (a) follow a rules-based approach to making policy, (b) increase its transparency and accountability to the public, and (c) better utilize market signals.
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Latest work in Monetary Policy
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Lyman Stone on Demographic and Marriage Decline
Do you view people as stomachs or brains?

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Pronatalism as Macroeconomic Policy | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Don’t Throw Out the Makeup Policy Baby With the Fait Bathwater | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Making Milton Friedman’s Monetarism Relevant Again
How the Fed’s shift to monetarism proved inflation is a monetary phenomenon—and why Friedman’s insights still matter for policy today
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Athanasios Orphanides on Real-Time Monetary Rules and their Impact on the Fed’s Framework Review
Natural Growth Targeting and the Future of Monetary Policy

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Welcome to Macroeconomic Policy Nexus! | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Dean Ball on the Past, Present, and Future of AI
Does the future belong to the curious?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Liya Palagashvili on the Gig Economy, Portable Benefits, and Changing Labor Regulations
Who actually makes up the gig economy?

- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Measuring Macroeconomic Policy: the NGDP Gap
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Evan Koenig on the Case for Nominal GDP Targeting
A former Fed insider explains his ideal framework

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Steven Kelly on the Challenges of Treasury Equity Funding for 13(3) Facilities
Is there a better way to do emergency Fed lending?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Senator Pat Toomey on Fed Governance, Monetary Policy, and the future of Digital Assets
Can our debt problem be solved?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Brian Albrecht on Business Dynamism, Greedflation, and Antitrust
Do we need to rethink what we know about Econ 101, again?

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Javier Milei’s Approach to Politics Has Been Working ‘Very Well’ | Sky News
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
The Fed Framework Review: Macro Musings’ Greatest NGDP Targeting Hits
Are you glutton for Macro Musings punishment?

- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
Outlook of Inflation Under Trump | American Radio Journal
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Peter Conti-Brown on the Fed under Trump 2.0, Reforming the Discount Window, and Providential Moments
Could we all use a little more faith?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
David Bahnsen on the Incoming Trump Administration and the Financialization of the US Economy
Are we kicking too many cans down the road?

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Things Are Looking Up for Argentina | City Journal
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Macro Musings 2024 Retrospective
Who is in David’s starting five of macro economists?

Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Lyman Stone on Demographic and Marriage Decline
Do you view people as stomachs or brains?

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Pronatalism as Macroeconomic Policy | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Don’t Throw Out the Makeup Policy Baby With the Fait Bathwater | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Making Milton Friedman’s Monetarism Relevant Again
How the Fed’s shift to monetarism proved inflation is a monetary phenomenon—and why Friedman’s insights still matter for policy today
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Athanasios Orphanides on Real-Time Monetary Rules and their Impact on the Fed’s Framework Review
Natural Growth Targeting and the Future of Monetary Policy

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Welcome to Macroeconomic Policy Nexus! | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Dean Ball on the Past, Present, and Future of AI
Does the future belong to the curious?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Liya Palagashvili on the Gig Economy, Portable Benefits, and Changing Labor Regulations
Who actually makes up the gig economy?

- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Measuring Macroeconomic Policy: the NGDP Gap
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Evan Koenig on the Case for Nominal GDP Targeting
A former Fed insider explains his ideal framework

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Steven Kelly on the Challenges of Treasury Equity Funding for 13(3) Facilities
Is there a better way to do emergency Fed lending?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Senator Pat Toomey on Fed Governance, Monetary Policy, and the future of Digital Assets
Can our debt problem be solved?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Brian Albrecht on Business Dynamism, Greedflation, and Antitrust
Do we need to rethink what we know about Econ 101, again?

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Javier Milei’s Approach to Politics Has Been Working ‘Very Well’ | Sky News
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
The Fed Framework Review: Macro Musings’ Greatest NGDP Targeting Hits
Are you glutton for Macro Musings punishment?

- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
Outlook of Inflation Under Trump | American Radio Journal
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Peter Conti-Brown on the Fed under Trump 2.0, Reforming the Discount Window, and Providential Moments
Could we all use a little more faith?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
David Bahnsen on the Incoming Trump Administration and the Financialization of the US Economy
Are we kicking too many cans down the road?

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Things Are Looking Up for Argentina | City Journal
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Macro Musings 2024 Retrospective
Who is in David’s starting five of macro economists?

Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Making Milton Friedman’s Monetarism Relevant Again
How the Fed’s shift to monetarism proved inflation is a monetary phenomenon—and why Friedman’s insights still matter for policy today
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Measuring Macroeconomic Policy: the NGDP Gap
- | Federal Reserve Framework Review Federal Reserve Framework Review
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Post-pandemic Inflation and Improving FAIT with Nominal GDP Level Targeting
Flexible average inflation targeting can be improved by dropping its asymmetry so that it is implemented as a form of nominal GDP level targeting
- | Federal Reserve Framework Review Federal Reserve Framework Review
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Financial Stability and Nominal GDP Targeting
NGDP targeting is simpler, more intuitive, and more robust than the current monetary policy strategy
- | Federal Reserve Framework Review Federal Reserve Framework Review
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Targeting Nominal GDP Through Monetary Control
Instead of using flexible average inflation targeting (FAIT) to control inflation, the Federal Reserve should shift its strategy to target the nation’s economic growth rate, measured as nominal (not adjusted for inflation) GDP
- | Federal Reserve Framework Review Federal Reserve Framework Review
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
A Critique of Lars Svensson’s Arguments Against NGDP Targeting
Lars Svensson’s conclusion that nominal GDP targeting (NGDPT) is inferior to average inflation targeting rested upon several subtle fallacies, so the Fed should use its current framework review to reconsider NGDPT
- | Federal Reserve Framework Review Federal Reserve Framework Review
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
A Rule-Based Monetary Policy
Monetary policy remains a contentious topic, but historical evidence, particularly from the Volcker–Greenspan era, suggests that the rule-based approach would offer greater predictability, stability, transparency, and consistency in Fed policy
- | Federal Reserve Framework Review Federal Reserve Framework Review
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
An Effective Monetary Policy with Nominal GDP Level Targeting
The Federal Reserve should consider adopting a policy of nominal GDP level targeting, which is the best way to stabilize the labor market and the financial system while maintaining an average inflation rate of close to 2 percent
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- | Policy Briefs Policy Briefs
The Fed’s 2024–25 Framework Review: Optimizing the Dual Mandate Through Nominal GDP Level Targeting
As the Federal Reserve considers how to implement its dual mandate of price stability and maximum employment, it should adopt—or approach—nominal GDP level targeting as a benchmark framework.
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
A New Measure of the Stance of Eurozone Monetary Policy
The NGDP gap can help policymakers assess whether current policy is on track
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Last Resort Lending: Classical Thought vs. Modern Federal Reserve Practice
Central banks used to play a far smaller role in credit markets than the Federal Reserve does today.
- | Monetary Policy Monetary Policy
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Strengthening the Federal Reserve’s Accountability to the US Congress
Congress has a constitutional duty to oversee the Federal Reserve, but the complexity of its monetary policy has outpaced existing oversight tools. This brief looks at approaches for restoring the balance between the Fed’s independence and accountability.
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POLICY SPOTLIGHT | A Rule-Based Monetary Policy
- | Monetary Policy Monetary Policy
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The Economic Situation, September 2024
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Enhancing FOMC Transparency: Making Implicit Monetary Policy Rules Explicit
The FOMC communicates the consistency in its monetary policy to markets but not the public. In order to be more accountable and transparent, the FOMC should communicate that consistency to the public and Congress as well.
- | Monetary Policy Monetary Policy
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What the Fed Needs to Do to Control Inflation and Stabilize the Economy
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q1 2024
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The Neutral Level of NGDP and the NGDP Gap: Q4 2023
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Getting Monetary Policy Right: What Should the Federal Reserve Have Learned from Its Pandemic Response?
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Governance and Diversity at the Federal Reserve
Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Lyman Stone on Demographic and Marriage Decline
Do you view people as stomachs or brains?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Athanasios Orphanides on Real-Time Monetary Rules and their Impact on the Fed’s Framework Review
Natural Growth Targeting and the Future of Monetary Policy

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Dean Ball on the Past, Present, and Future of AI
Does the future belong to the curious?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Liya Palagashvili on the Gig Economy, Portable Benefits, and Changing Labor Regulations
Who actually makes up the gig economy?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Evan Koenig on the Case for Nominal GDP Targeting
A former Fed insider explains his ideal framework

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Steven Kelly on the Challenges of Treasury Equity Funding for 13(3) Facilities
Is there a better way to do emergency Fed lending?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Senator Pat Toomey on Fed Governance, Monetary Policy, and the future of Digital Assets
Can our debt problem be solved?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Brian Albrecht on Business Dynamism, Greedflation, and Antitrust
Do we need to rethink what we know about Econ 101, again?

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Javier Milei’s Approach to Politics Has Been Working ‘Very Well’ | Sky News
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
The Fed Framework Review: Macro Musings’ Greatest NGDP Targeting Hits
Are you glutton for Macro Musings punishment?

- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
Outlook of Inflation Under Trump | American Radio Journal
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Peter Conti-Brown on the Fed under Trump 2.0, Reforming the Discount Window, and Providential Moments
Could we all use a little more faith?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
David Bahnsen on the Incoming Trump Administration and the Financialization of the US Economy
Are we kicking too many cans down the road?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Macro Musings 2024 Retrospective
Who is in David’s starting five of macro economists?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
George Selgin on Strategic Bitcoin Reserves, Debanking, and the Fed’s Framework Review
Despite popular belief, building a strategic Bitcoin reserve is unlikely to strengthen the dollar or enhance its role as the world’s reserve currency.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Joey Politano on the AI Investment Boom and Trends in Economic Growth
While the recent surge in AI investment presents an opportunity to supercharge economic growth, the ongoing geopolitical battle with China remains a crucial obstacle to overcome.

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Consumer Impact: Breaking Down the Latest US Inflation Numbers | Global Catholic Television Network’s News Nightly
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- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Jeffrey Lacker on the History of Fed Credit Policy and the Four Doctrines of Fed Lending
It’s crucial to understand the history of credit policy at the Fed in order to effectively improve the system moving forward.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Zachary Mazlish on the Political Implications of Inflation and the Impact of Transformative AI
Assessing the outcome of the 2024 presidential election, it is clear that inflation remains the most significant driver of national voting patterns.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Ellen Correia Golay on the Keys to Improving Treasury Market Resiliency
Over the past year, the Treasury Department has taken numerous crucial steps to enhance the resiliency and liquidity of the Treasury market.

Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Pronatalism as Macroeconomic Policy | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Don’t Throw Out the Makeup Policy Baby With the Fait Bathwater | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Welcome to Macroeconomic Policy Nexus! | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Things Are Looking Up for Argentina | City Journal
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Fed Needs To Learn from Its Inflation Mistakes – The Biggest Lesson | Barron’s
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
A Dangerous Gambit | City Journal
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
A Plan for Election-year Rate Cuts Without the Political Chaos | The Hill
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Will High Interest Rates and a Weakening Economy Deliver a Recession? | Washington Examiner
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Federal Reserve Should Let Exchange Rates Float | Discourse
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- | Expert Commentary Expert Commentary
Dollarization or Not, Argentina’s Future Will Be Expensive | Bloomberg Opinion
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
How To Stop Mission Creep at the Federal Reserve | Discourse
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Part 4: Reasons a Court Should Find That the SEC Lacked Legal Authority for the Climate-Change Disclosure Rules | FinRegRag
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Instead of More Political Control, the Fed Needs More Rules and Transparency | Discourse
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Part 2: Reasons a Court Should Find That the SEC Lacked Legal Authority for the Climate-change Disclosure Rules | FinRegRag
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Reasons a Court Should Find that the SEC Lacked Legal Authority for the Climate-Change Disclosure Rules (Part 1) | FinRegRag
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
A Remedy for Inflation’s High Tides? | Tribune News Service
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Inflation’s Last-mile Problem | City Journal
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Why Trump’s Dollar-devaluation Scheme Is a Bad Idea | National Review
- | Financial Markets Financial Markets
- | Expert Commentary Expert Commentary
Looking for New Life in the National and Regional Economy | GroundBreak Carolinas
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- | Expert Commentary Expert Commentary