Sound Money Project
The Sound Money Project was founded in January 2009 to conduct research and promote awareness about monetary stability and financial privacy. The project is comprised of leading academics and practitioners in money, banking, and macroeconomics. It offers regular commentary and in-depth analysis on monetary policy, alternative monetary systems, financial markets regulation, cryptocurrencies, and the history of monetary and macroeconomic thought.
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What Did the Fed Know in the Great Recession?
“The Fed’s poor forecasting record should make us skeptical of its ability to effectively manage the money supply in times of economic turmoil. It would be prudent to consider structural reforms that might improve FOMC’s decision-making process.” ~ Thomas L. Hogan
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Price Controls?!
“Price controls are a bad idea. But support for them appears to be growing. They are a terrible tool for dealing with inflation. They make no effort to reduce nominal spending. And they exacerbate supply constraints.” ~ William J. Luther
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Inflation is High, Will Remain Elevated for Years
“At this stage, two things seem pretty clear: Inflation is high and will likely remain above target for a few years. My own view is that the FOMC is painting a rather rosy picture, and that market expectations provide a better guide for estimating inflation.” ~ William J. Luther
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Greedy Corporations and Inflation
“Only a monetary policy geared to reduce inflation will be effective in reducing inflation. This is as true now as when the Federal Reserve lowered inflation in the early 1980s.” ~ Gerald P. Dwyer
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Bitcoin Is Not a Battery
“One should not care about the dollar price of bitcoin or the bitcoin price of bitcoin. What really matters is how many real goods and services one can buy with bitcoin––that is, its real purchasing power.” ~ William J. Luther
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Does Monetary Policy Matter?
“The Fed’s actual performance has not been ideal. Its monetary policy mistakes have had dire consequences for ordinary Americans and the US economy. Those mistakes make it clear that monetary policy matters.” ~ Thomas L. Hogan
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Why Deficits Matter
“If we want to argue deficits matter more conventionally, we’ll have to do some more theoretical heavy lifting. The usual aggregate demand stories we tell don’t cut it.” ~ Alexander William Salter
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Forecasting Prices from FOMC Projections
“While the period of time over which the Fed is committed to averaging inflation is not explicit, one might have reasonably expected it to ultimately offset the high inflation associated with the pandemic. Alas, that no longer appears to be the case.” ~ William J. Luther
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Some Frustrating Economics in the Wall Street Journal
“The Journal is usually a bastion of sound economics. Alas, nobody bats 1.000. If we want an economic ‘return to normalcy,’ we have to get these basics right.” ~ Alexander William Salter
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Fed Officials Think Inflation Should Remain High Through 2024
“It seems the Fed is not committed to hitting its average inflation target. Inflation will be transitory in the sense that the rate will eventually return to 2 percent. But the price level will likely remain elevated.” ~ William J. Luther
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Supply and Demand Is Not Just for Microeconomics
“The usefulness of supply and demand is most obvious in the case of microeconomics, which focuses on households and firms. But it’s just as handy for macroeconomics in studying economy-wide phenomena like growth and business cycles.” ~ Alexander William Salter
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How Much Can the Supply Chain Explain the Rise of Inflation?
“Once we move from the realm of small price level movements to a more permanent and higher inflation rate scenario, it is more likely that the source of the rise in the price level is on the monetary side—even if the government doesn’t want to admit it.” ~ Nicolás Cachanosky
