Sound Money Project
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Stephen Roach Calls for a New Monetary Policy Regime
Stephen Roach, Chief Economist of Morgan Stanley, have been a critic of the Fed for many years. In a Financial Times op-ed he makes the case for exiting the current monetary policy regime once and for all: “it is high time to banish the moral hazard of macro policy – the false sense of security…
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“Venezuela’s Monetary Mayhem”
“Anchoring the currency to the dollar and thus outsourcing monetary policy to the U.S. Federal Reserve had been a success, but special interests and politicians could not bear that it robbed them of power. Venezuela is another place where the politicians see no reason why the state’s appetite for grabbing private-sector wealth should be constrained.…
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Fed Monetary Dissident Thomas Hoenig
Thomas Hoenig, a voting member of the Fed’s interest rate decision body, the Federal Open Market Committee (FOMC), has on several occasions expressed concerns about the direction of U.S. monetary policy. During the last year, he has been a lone voice of dissent at FOMC meetings. This weekend’s Wall Street Journal features an interview with…
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Europe’s Freezing Money Markets
“Money markets are showing rising levels of mistrust between Europe’s banks on concern an almost $1 trillion bailout package won’t prevent a sovereign debt default that might trigger a breakup of the euro.” “The cost to hedge against losses on European bank bonds is 63 percent higher than a month ago. Investment-grade corporate debt sales…
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Shining a Light on the Fed
Much has been made recently of the plan to audit the Fed (here, here and here). It is a very interesting idea. Given the amount of money ($2 trillion) the Fed sent out in bailout loans, it makes sense that the taxpayers who funded it want to know where the money went. Given the Fed’s…
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Will Congress ever reform the Fed?
“This week’s Senate floor votes on the powers of the Federal Reserve caught my attention. Despite Congress’s bipartisan lashing of the Fed for its performance before and after the financial crisis of 2008, the Fed this week defeated two challenges to its autonomy as a central bank. Granted, Congress’s pummeling of the Fed (recall Bernanke’s…
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Roche – Not the way to solve the debt crisis
“the world is facing a major sovereign debt crisis that will squeeze economic growth and possibly deliver a series of debt default events down the road. Sovereign debt issuance is now sucking up 25 per cent of available world savings and that will squeeze the ability of the private sector to invest in productive opportunities.”…
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“Warning: Inflation May Be Harmful to Your Growth”
“While few doubt that very high inflation is bad for growth, there is less agreement about the effects of moderate inflation. Using panel regressions and allowing for a nonlinear specification, this paper finds a statistically and economically significant negative relationship between inflation and growth, which holds robustly at all but the lowest inflation rates. A…
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“The Relationship Between Inflation and the Budget Deficit in Turkey”
“For Turkey, Metin (1995) analyzed inflation using a general framework of sectoral relationships and found that fiscal expansion was a determining factor for inflation. The excess demand for money affected inflation positively, but only in the short run. On the other hand, imported inflation, the excess demand for goods, and the excess demand for assets…
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“Calculating the Candy Price Index”
“In this classroom experiment, students develop a price index based on candy-purchasing decisions made by members of their class. They use their index to practice calculationg inflation rates and to consider the strengths and weaknesses of the consumer prices index (CPI). Instructors can use the experiment as an introduction to the topic of inflation and…
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Stephen Roach Calls for a New Monetary Policy Regime
Stephen Roach, Chief Economist of Morgan Stanley, have been a critic of the Fed for many years. In a Financial Times op-ed he makes the case for exiting the current monetary policy regime once and for all: “it is high time to banish the moral hazard of macro policy – the false sense of security…
-
“Venezuela’s Monetary Mayhem”
“Anchoring the currency to the dollar and thus outsourcing monetary policy to the U.S. Federal Reserve had been a success, but special interests and politicians could not bear that it robbed them of power. Venezuela is another place where the politicians see no reason why the state’s appetite for grabbing private-sector wealth should be constrained.…
-
Fed Monetary Dissident Thomas Hoenig
Thomas Hoenig, a voting member of the Fed’s interest rate decision body, the Federal Open Market Committee (FOMC), has on several occasions expressed concerns about the direction of U.S. monetary policy. During the last year, he has been a lone voice of dissent at FOMC meetings. This weekend’s Wall Street Journal features an interview with…
-
Europe’s Freezing Money Markets
“Money markets are showing rising levels of mistrust between Europe’s banks on concern an almost $1 trillion bailout package won’t prevent a sovereign debt default that might trigger a breakup of the euro.” “The cost to hedge against losses on European bank bonds is 63 percent higher than a month ago. Investment-grade corporate debt sales…
-
Shining a Light on the Fed
Much has been made recently of the plan to audit the Fed (here, here and here). It is a very interesting idea. Given the amount of money ($2 trillion) the Fed sent out in bailout loans, it makes sense that the taxpayers who funded it want to know where the money went. Given the Fed’s…
-
Will Congress ever reform the Fed?
“This week’s Senate floor votes on the powers of the Federal Reserve caught my attention. Despite Congress’s bipartisan lashing of the Fed for its performance before and after the financial crisis of 2008, the Fed this week defeated two challenges to its autonomy as a central bank. Granted, Congress’s pummeling of the Fed (recall Bernanke’s…
-
Roche – Not the way to solve the debt crisis
“the world is facing a major sovereign debt crisis that will squeeze economic growth and possibly deliver a series of debt default events down the road. Sovereign debt issuance is now sucking up 25 per cent of available world savings and that will squeeze the ability of the private sector to invest in productive opportunities.”…
-
“Warning: Inflation May Be Harmful to Your Growth”
“While few doubt that very high inflation is bad for growth, there is less agreement about the effects of moderate inflation. Using panel regressions and allowing for a nonlinear specification, this paper finds a statistically and economically significant negative relationship between inflation and growth, which holds robustly at all but the lowest inflation rates. A…
-
“The Relationship Between Inflation and the Budget Deficit in Turkey”
“For Turkey, Metin (1995) analyzed inflation using a general framework of sectoral relationships and found that fiscal expansion was a determining factor for inflation. The excess demand for money affected inflation positively, but only in the short run. On the other hand, imported inflation, the excess demand for goods, and the excess demand for assets…
-
“Calculating the Candy Price Index”
“In this classroom experiment, students develop a price index based on candy-purchasing decisions made by members of their class. They use their index to practice calculationg inflation rates and to consider the strengths and weaknesses of the consumer prices index (CPI). Instructors can use the experiment as an introduction to the topic of inflation and…
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