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.
Advisory Board: Gerald P. Dwyer, Steve H. Hanke, Jerry L. Jordan, Lawrence H. White
Director: William J. Luther
Senior Fellows: Nicolás Cachanosky, Joshua R. Hendrickson, Thomas L. Hogan, Gerald P. O’Driscoll, Jr., Alexander W. Salter
Fellows: Bryan Cutsinger, Matthew Schaffer
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“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
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“Providing revenue to the state is one of the reasons (and, perhaps the primary reason) governments worldwide monopolize the issuance of high-powered money.” ~ Bryan Cutsinger
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“Fed officials will likely continue tightening, and to a greater extent than previously projected. Their overreaction will not undo the damage of acting too late. It will make matters worse.” ~ Nicolás Cachanosky
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“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
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“How high rates will ultimately go depends on how inflation evolves over the next few months — and how quickly the Fed reacts to restore confidence in its longer term-inflation projections. The January PCEPI release marked a step in the wrong direction.” ~ William J. Luther
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“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
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“Unconstrained politicians are likely to authorize more borrowing than they should. The debt ceiling might provide a useful—if somewhat limited—constraint against excessive borrowing.” ~ William J. Luther
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“While relatively well-functioning governments have managed to find mechanisms that mitigate the problem, it seems unlikely that Argentina and Brazil will be able to prevent a tragedy of the monetary commons given their history of money and fiscal mischief.” ~ Bryan Cutsinger
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“The Fed was late to realize nominal spending was surging and failed to correct course promptly when it realized it had made a mistake. Prices are higher today—and will remain permanently higher—as a consequence.” ~ William J. Luther
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“These efforts to increase Congressional oversight are unlikely to depoliticize the Fed. Indeed, they are likely to make matters even worse.” ~ Nicolás Cachanosky