Alexander W. Salter
Politics, Not Markets, Makes Banking Unstable
“Banking reform should rank high on our list of policy priorities, but moving away from fractional reserves shouldn’t be a part of the conversation.” ~ Alexander William Salter
Moral hazard is a fact of life. The Fed should focus on inflation.
“To the shame of two generations of economists-turned-policy-advisors, moral hazard is a fact of life. We don’t need to add permanent dollar depreciation to this mess.” ~ Alexander William Salter
What To Do About Deficits, Debt
“When it comes to fiscal follies, this time is different. Let’s not pass the buck. Instead, let’s make the necessary sacrifices to ensure the long-run integrity of the United States. Let’s plant the trees.” ~ Alexander William Salter
The Fed Isn’t Powerless
“Responsible students of monetary policy must vigorously resist the ‘powerless Fed’ myth. All it does is absolve central bankers of responsibility for what, on the basis of good theory and mounting evidence, is primarily their fault to begin with.” ~ Alexander William Salter
There’s No Such Thing as a Wage-Price Spiral
“The recent uptick in inflation is worrying, and the Fed needs to get a handle on the situation before higher inflation expectations become entrenched. But the Fed doesn’t need to take a sledgehammer to labor markets to ease the economy’s pricing pressures.” ~ Alexander William Salter
Persistently Pesky Price Pressures
“Although it may be difficult, the Fed must persevere. Elevated aggregate demand remains the best explanation for ongoing inflation. There is no reason for the Fed to ease its policy.” ~ Alexander William Salter
Joblessness and the Fed
“Without a symmetric response to deviations from the target, the Fed’s so-called average inflation target will not produce 2 percent inflation on average. Instead, it will tend to produce inflation that exceeds 2 percent. That’s a far cry from price stability.” ~ Alexander William Salter
Should the Fed Stop Tightening?
“The Fed should stay the course. Putting the nail in the inflationary coffin is more important than hyper-calibrating a ‘soft landing.’ But it likely won’t be long before we’re done.” ~ Alexander William Salter
Putting Aggregate Demand and Aggregate Supply to Work
“Economists use aggregate demand and aggregate supply (AS-AD model) to understand how inflation and real income growth are jointly determined.” ~ Bryan Cutsinger & Alexander William Salter
Does the Fed Control Interest Rates?
“The Fed is a failed institution in need of major reforms. But we won’t make the right changes if we don’t understand the basic relationship between central banks and capital markets.” ~ Alexander William Salter
