Alexander W. Salter

"This simple model is a good first approximation to aggregate economic performance. Economists know this. Unfortunately, they sometimes ignore it for partisan reasons." ~ Alexander William Salter

"It’s important to get the basic economic relationships right when discussing monetary policy. Economic growth isn’t inflationary. Journalists and central bankers should stop saying otherwise." ~ Alexander William Salter

"The best way to reduce systemic risk is to give the risktakers the incentive to economize on risk. An extended liability regime for banking is a simple and elegant way to improve incentives. We should seriously consider it." ~ Alexander William Salter

"The Fed’s chief task is to restore its lost credibility. In retrospect, the switch to average inflation targeting was a mistake. It gave the Fed plausible deniability for noisier, less predictable policy." ~ Alexander William Salter

"Monetary policy is about money, not interest rates. Central bankers should stop trying to implement monetary policy by messing with relative prices. There are better measures and more effective transmission mechanisms." ~ Alexander William Salter

"While interest rates can sometimes be useful as a policy barometer, the various monetary measures (from the monetary base at narrowest to total nominal expenditures at broadest) matter far more." ~ Alexander William Salter

"The Fed failed at its initial task of promoting financial stability. It has failed at conducting monetary policy as well. Given the Fed’s major financial-policy and monetary-policy errors since 2008, we should explore major structural changes." ~ Alexander William Salter

"As long as we’re stuck with a central bank, we should give it an unambiguous mandate and watch it like a hawk. Monetary policymakers answer to the people’s representatives, in Congress assembled. Let’s remind them." ~ Alexander William Salter

"We have to be very careful about generalizing across money and banking regimes. Many features of one system don’t translate to others. Depending on the 'rules of the game,' the supply of money responds to the price of money in very different ways." ~ Alexander William Salter

"If nothing else, a cash-balances interpretation of the equation of exchange can help us better understand the relationship between the money supply and nominal income." ~ Alexander William Salter