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.
Featured
Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Ryan Bourne on *The War on Prices: How Popular Misconceptions about Inflation, Prices, and Value Create Bad Policy*
In an era plagued by high inflation and its pernicious economic effects, it’s more important than ever to dispel the many false notions surrounding prices and the crucial role they play in the broader economy.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
George Selgin on Fed Master Accounts, Central Bank Independence, and the Fed’s Balance Sheet
George Selgin rejoins David Beckworth to discuss a variety of important developments in the monetary and fiscal policy space.

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Dollarization or Not, Argentina’s Future Will Be Expensive | Bloomberg Opinion
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Roberto Perli on the Past, Present, and Future of the Fed’s Balance Sheet
Slowing the pace of its balance sheet runoff is an important step the Fed can take to more effectively manage risks while allowing the banking system to adapt to lower levels of reserves.

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
How To Stop Mission Creep at the Federal Reserve | Discourse
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q1 2024
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Mary Daly on Fed Policy, the Economic Impacts of AI, and the Future of the Fed’s Framework
As the Fed closes in on its next framework review period, properly balancing inflation risks with labor market stability remains the core mission of the central bank moving forward.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Dan Katz and Stephen Miran on Reforming the Federal Reserve’s Governance
Restructuring the terms of Fed board members and bolstering the relative power of reserves banks are just a few ways to improve the accountability and legitimacy of Fed governance.

- | 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
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Richard Clarida on FAIT, R-Star, and the Future of the Fed’s Framework
The Fed should consider improving its strategic communication while more effectively anchoring future inflation expectations as it closes in on its next framework review period.

- | 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
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Saleha Mohsin on *Paper Soldiers: How the Weaponization of the Dollar Changed the World Order*
The global strength of the dollar has provided many economic and geopolitical benefits for the US, but it has also come with numerous costs, both domestically and internationally.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Josh Hendrickson on the Treasury Standard and Global Dollar Dominance
From the collapse of the Bretton Woods system to the present, the US has continued to further implement its Treasury Standard across the globe as an effective economic and geopolitical tool.

- | Financial Markets Financial Markets
- | Expert Commentary Expert Commentary
Looking for New Life in the National and Regional Economy | GroundBreak Carolinas
- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Mortgage Rates Creep Higher, Carmax Stock Plunges | Yahoo! Finance Live
Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Ryan Bourne on *The War on Prices: How Popular Misconceptions about Inflation, Prices, and Value Create Bad Policy*
In an era plagued by high inflation and its pernicious economic effects, it’s more important than ever to dispel the many false notions surrounding prices and the crucial role they play in the broader economy.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
George Selgin on Fed Master Accounts, Central Bank Independence, and the Fed’s Balance Sheet
George Selgin rejoins David Beckworth to discuss a variety of important developments in the monetary and fiscal policy space.

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Dollarization or Not, Argentina’s Future Will Be Expensive | Bloomberg Opinion
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Roberto Perli on the Past, Present, and Future of the Fed’s Balance Sheet
Slowing the pace of its balance sheet runoff is an important step the Fed can take to more effectively manage risks while allowing the banking system to adapt to lower levels of reserves.

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
How To Stop Mission Creep at the Federal Reserve | Discourse
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q1 2024
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Mary Daly on Fed Policy, the Economic Impacts of AI, and the Future of the Fed’s Framework
As the Fed closes in on its next framework review period, properly balancing inflation risks with labor market stability remains the core mission of the central bank moving forward.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Dan Katz and Stephen Miran on Reforming the Federal Reserve’s Governance
Restructuring the terms of Fed board members and bolstering the relative power of reserves banks are just a few ways to improve the accountability and legitimacy of Fed governance.

- | 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
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Richard Clarida on FAIT, R-Star, and the Future of the Fed’s Framework
The Fed should consider improving its strategic communication while more effectively anchoring future inflation expectations as it closes in on its next framework review period.

- | 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
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Saleha Mohsin on *Paper Soldiers: How the Weaponization of the Dollar Changed the World Order*
The global strength of the dollar has provided many economic and geopolitical benefits for the US, but it has also come with numerous costs, both domestically and internationally.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Josh Hendrickson on the Treasury Standard and Global Dollar Dominance
From the collapse of the Bretton Woods system to the present, the US has continued to further implement its Treasury Standard across the globe as an effective economic and geopolitical tool.

- | Financial Markets Financial Markets
- | Expert Commentary Expert Commentary
Looking for New Life in the National and Regional Economy | GroundBreak Carolinas
- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Mortgage Rates Creep Higher, Carmax Stock Plunges | Yahoo! Finance Live
Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Currency Manipulation: Reframing the Debate
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
Currency Manipulation, Saving Manipulation, and the Current Account Balance
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
Restoring the Promise of Federal Reserve Governance
- | Monetary Policy Monetary Policy
- | Books Books
Reflections on Allan H. Meltzer’s Contributions to Monetary Economics and Public Policy

- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Facts, Fears, and Functionality of NGDP Level Targeting
A Guide to a Popular Framework for Monetary Policy
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Should the Fed Pay Interest on Bank Reserves?
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Economic Situation, September 2019

- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
POLICY SPOTLIGHT: The Relationship between Interest Rates and Monetary Policy

- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
POLICY SPOTLIGHT: How the Fed Controls Monetary Policy

- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
Rules vs. Discretion Revisited: A Proposal to Make the Strategy of Monetary Policy Transparent

- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
How Should the Central Bank Determine Its Target for Nominal Income Growth?
Lessons from Free Banking and Friedman

- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
Commodity Money, Free Banking, and Nominal Income Targeting
Lessons for Monetary Policy Reform
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Economic Situation, June 2019
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
An Evaluation of Nominal GDP versus Price-Level Targeting
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Understanding the Federal Reserve

- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Hyperinflation and Seignorage in Venezuela
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Danger in Using Monetary Policy to Address Housing Affordability
A Lesson from the Great Recession
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
How Reliable Is Modern Monetary Theory as a Guide to Policy?
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Economic Situation, March 2019
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
Money Demand and Seignorage Maximization before the End of the Zimbabwean Dollar
Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
Inflation and Job Numbers | American Radio Journal
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Skanda Amarnath and Preston Mui on the Tribal Transitory Debate and the Future of the Fed’s Framework
Entering 2024, economists and policymakers should consider dropping tribalist attitudes when discussing the future path of inflation.

- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
What’s the Difference Between the CPI and the PPI? | Marketplace Radio
- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
CPI Inflation and the Broader Economy | American Ag Network
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Claudio Borio on the Future of Central Bank Operating Systems
Despite overestimated concerns surrounding balance sheet size and reserve demand instability, central banks should consider the possibility of returning to a scarce reserve operating system.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Colby Smith, Steven Kelly, and Gerard DiPippo on the Highlights of 2023 and Looking Ahead to the Future
An esteemed panel of guests join Macro Musings to reflect on the biggest surprises, themes, and stories of 2023 with an eye toward what 2024 may have in store.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Tyler Cowen on the Greatest Economist of All Time and Other Macro Awards
From Adam Smith to Milton Friedman, Tyler Cowen breaks down his evidence and reasoning for who should be considered the greatest economist of all time.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Nicolas Cachanosky on Dollarization in Argentina
As hyperinflation and other macroeconomic concerns continue plague Argentina, committing to a policy of dollarization may offer a much needed remedy.

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
The Fed’s Decision on Interest Rates | BBC
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Charlie Evans on the Past, Present, and Future of U.S. Monetary Policy
Heading into the next framework review, policy messaging will be a crucial consideration for the Fed as it considers possible changes to the current FAIT regime.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Matteo Maggiori and Jesse Schreger on Geoeconomics and its Policy Implications
As geopolitical power struggles continue to unfold across the globe, the burgeoning field of geoeconomics is becoming increasingly crucial as a tool to help understand how nations leverage their economic strength in the political arena.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Matthew Raskin on Treasury Market Stability, Interest Rates, and the Fed’s Balance Sheet
Increased central clearing and use of the Standing Repo Facility are just a few ways to improve the liquidity and stability of the Treasury market.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
David Papell on the History, Motivations, and Current Applications of Monetary Policy Rules
Embracing inertial policy rules could have spared the Fed from the errors it committed in the aftermath of the COVID-19 recession.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Rachel Siegel on the Fed, Commercial Real Estate, and the Economics of the 2024 Election
As inflation and other economic issues top the list of concerns heading into next year’s election, the commercial real estate market remains a major threat to financial and broader macro stability.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Will Bateman on the History and Evolving Nature of the Fiscal Fed
Contrary to conventional wisdom, the Fed has a long and extensive fiscal history of building, smoothing, and rescuing US Treasury debt markets.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
PJ Glandon on the State of Macroeconomics: Research and Pedagogy
Quantitative theory-based analysis has begun to take over the field of macroeconomics over the past 40 years, and this is having major impacts on the pedagogic future of the discipline.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Ed Nelson on the Life, Work, and Legacy of Bennett McCallum
In addition to being a pioneer and a titan in the fields of macroeconomics and monetary policy, Bennett McCallum was an even better colleague, friend, and husband who has left an illustrious legacy.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Sam Hammond on AI, Techno-Feudalism, and the Future of the State
As AI technology continues to swiftly develop, the role of government may soon undergo a radical transformation.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Marc Goldwein on the US Government Budget: Structure, Challenges, and Reform Strategies
In order to help secure the long-term health of the US economy, policymakers must begin to grapple with the harsh realities of entitlements reform.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Lev Menand and Josh Younger on *Money and the Public Debt: Treasury Market Liquidity as a Legal Phenomenon*
After its near collapse in March of 2020, robust legal reforms are needed ensure increased liquidity and stability in the Treasury market moving forward.

Latest work in Monetary Policy
Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Is a Gold Standard Practical Today?
Despite the strengths of a gold standard system, there are better alternatives

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
A Fed for Next Time: Ideas for a Crisis‐Ready Central Bank
- | Government Spending Government Spending
- | Feature Feature
The Way Forward
Policy proposals from the Mercatus Center to jump-start America's economy now
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
New Research on the Economic Effects of COVID-19
New Mercatus research from the week of Mar 16-20

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Even in a World of Zero-Percent Interest Rates, the Fed Likely Has Enough Monetary Policy Tools
But Congress should nevertheless give the central bank added authority in case of a crisis

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Ben Moll on the Basics of HANK Models and How They Can Be Applied to Policymaking
Heterogeneous Agent New Keynesian models are becoming increasingly influential in the macro sphere, and this development could have major implications for future policy.

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
There is No Substitute for Monetary Policy
Even with interest rates near zero, the Fed still has effective ways to stimulate the economy

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Why Ben Bernanke Should Advocate for NGDP Targeting
Moving away from inflation targeting could help the Fed better navigate future economic cycles

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Felix Rohatyn’s Legacy Is Not as a Defender of Markets
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Paul Volcker’s Noble War on Inflation
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
From Stagflation to Quantitative Easing: The History of the Cato Institute’s Monetary Conference
On searching for stable money from 13 percent inflation to the great moderation and beyond

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Facts About Nominal GDP Level Targeting

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
How a Labor Shortage Could Explain Negative Interest Rates
It’s as plausible as many other theories as an explanation for negative yields.
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Challenges of Dollar Dominance

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
"Enormous" Pressure in Next Recession for Wider QE Purchases, Former FOMC Voter Predicts

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Safe Asset Supply Failing to Meet Demand, Economist Crowe Says

- | International Freedom and Trade International Freedom and Trade
- | Expert Commentary Expert Commentary
How the President Can Help the Fed and Economy
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Trump Is Wrong: A Weak Dollar is Bad for America
A currency that goes further allows all Americans, especially the poorest, to buy more essential goods and services than they could otherwise afford.
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Lesson of Bretton Woods
Every era’s monetary and financial institutions are unimaginable until they’re real.
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
US Economic Performance: A Midyear Assessment
