Monetary Policy
By minimizing the harm caused by recessions and high inflations, monetary policy can promote economic stability and create an environment in which individuals and businesses prosper and thrive. In pursuit of these goals, Mercatus research shows why and how the Federal Reserve should (a) follow a rules-based approach to making policy, (b) increase its transparency and accountability to the public, and (c) better utilize market signals.
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Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Fed’s 2024–25 Framework Review: Optimizing the Dual Mandate Through Nominal GDP Level Targeting
As the Federal Reserve considers how to implement its dual mandate of price stability and maximum employment, it should adopt—or approach—nominal GDP level targeting as a benchmark framework.
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Ellen Correia Golay on the Keys to Improving Treasury Market Resiliency
Over the past year, the Treasury Department has taken numerous crucial steps to enhance the resiliency and liquidity of the Treasury market.

- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
A New Measure of the Stance of Eurozone Monetary Policy
The NGDP gap can help policymakers assess whether current policy is on track
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Emil Verner on Banking Crises, Credit Booms, and the Rise of Populism
In order to prevent future financial crises, it is crucial to understand the causes of bank failures, and in particular, the deterioration of bank fundamentals.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Loretta Mester on How to Improve the Fed’s Operating Framework
If the Fed were to review its operating system, it could consider transitioning from an ample-reserves framework to a tiered-reserves framework as a way to improve financial stability and minimize its financial footprint.

- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
Why Monetary Policy Rules Matter | “Let People Prosper” podcast
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Fed Needs To Learn from Its Inflation Mistakes – The Biggest Lesson | Barron’s
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Jon Hartley on the Shadow Open Market Committee and Macroeconomic Policy
Understanding the linkages between monetary policy, fiscal policy, and economic growth are key to ensuring macroeconomic stability.

- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Last Resort Lending: Classical Thought vs. Modern Federal Reserve Practice
Central banks used to play a far smaller role in credit markets than the Federal Reserve does today.
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Tara Sinclair on Real-time Economic Analysis and the Fed’s Upcoming Framework Review
As real-time economic analysis becomes an increasingly important part of the policymaking process, it’s more important than ever to ensure that statistical agencies receive the funding they need.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Joseph Gagnon on the Trinity of COVID-Era Inflation and the Upcoming Fed Framework Review
Understanding the trinity of forces that drove the inflation surge during the pandemic period may provide valuable insights on how to prevent a similar episode in the future.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Emilio Ocampo on Dollarization and the State of the Argentine Economy
As Argentina’s economy continues to recover and rebound, transitioning to a dollarization policy may be the next step toward achieving economic revival.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Jonathon Hazell on the Costs and Causes of Inflation and the Phillips Curve Debate
When measuring the impacts of rising inflation on workers, it’s important to factor in the conflict costs associated with negotiating higher wages.

- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
The Performance of the Fed During the Recent Inflationary Cycle | The Society of Professional Economists’ “Econ Thoughts” (podcast)
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Thomas Drechsel on the Effects of Political Pressure and Identifying Monetary Policy Shocks
Recent data reveals that when U.S. presidents exert political pressure on the Federal Reserve, significant swings in inflation often follow.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Matthew Pines on the Geopolitical and National Security Implications of Cryptocurrency Adoption
Expanding institutional cryptocurrency adoption could be a crucial strategy for helping curb the expansion of China’s growing digital authoritarianism across the globe.

- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Strengthening the Federal Reserve’s Accountability to the US Congress
Congress has a constitutional duty to oversee the Federal Reserve, but the complexity of its monetary policy has outpaced existing oversight tools. This brief looks at approaches for restoring the balance between the Fed’s independence and accountability.
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Travis Hill on the Discount Window, Receivership Funding, and Financial Tokenization
Establishing a new pre-positioning rule could be a novel solution that would help normalize and destigmatize the use of the discount window moving forward.

- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
Should The Fed Cut Rates? | WTAN Radio
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Catherine Pakaluk on *Hannah’s Children: The Women Quietly Defying the Birth Dearth*
As birth rates continue to decline around the globe, it’s important to recognize the wide range of benefits that come with having more children and larger families.

Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Fed’s 2024–25 Framework Review: Optimizing the Dual Mandate Through Nominal GDP Level Targeting
As the Federal Reserve considers how to implement its dual mandate of price stability and maximum employment, it should adopt—or approach—nominal GDP level targeting as a benchmark framework.
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Ellen Correia Golay on the Keys to Improving Treasury Market Resiliency
Over the past year, the Treasury Department has taken numerous crucial steps to enhance the resiliency and liquidity of the Treasury market.

- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
A New Measure of the Stance of Eurozone Monetary Policy
The NGDP gap can help policymakers assess whether current policy is on track
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Emil Verner on Banking Crises, Credit Booms, and the Rise of Populism
In order to prevent future financial crises, it is crucial to understand the causes of bank failures, and in particular, the deterioration of bank fundamentals.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Loretta Mester on How to Improve the Fed’s Operating Framework
If the Fed were to review its operating system, it could consider transitioning from an ample-reserves framework to a tiered-reserves framework as a way to improve financial stability and minimize its financial footprint.

- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
Why Monetary Policy Rules Matter | “Let People Prosper” podcast
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Fed Needs To Learn from Its Inflation Mistakes – The Biggest Lesson | Barron’s
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Jon Hartley on the Shadow Open Market Committee and Macroeconomic Policy
Understanding the linkages between monetary policy, fiscal policy, and economic growth are key to ensuring macroeconomic stability.

- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Last Resort Lending: Classical Thought vs. Modern Federal Reserve Practice
Central banks used to play a far smaller role in credit markets than the Federal Reserve does today.
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Tara Sinclair on Real-time Economic Analysis and the Fed’s Upcoming Framework Review
As real-time economic analysis becomes an increasingly important part of the policymaking process, it’s more important than ever to ensure that statistical agencies receive the funding they need.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Joseph Gagnon on the Trinity of COVID-Era Inflation and the Upcoming Fed Framework Review
Understanding the trinity of forces that drove the inflation surge during the pandemic period may provide valuable insights on how to prevent a similar episode in the future.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Emilio Ocampo on Dollarization and the State of the Argentine Economy
As Argentina’s economy continues to recover and rebound, transitioning to a dollarization policy may be the next step toward achieving economic revival.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Jonathon Hazell on the Costs and Causes of Inflation and the Phillips Curve Debate
When measuring the impacts of rising inflation on workers, it’s important to factor in the conflict costs associated with negotiating higher wages.

- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
The Performance of the Fed During the Recent Inflationary Cycle | The Society of Professional Economists’ “Econ Thoughts” (podcast)
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Thomas Drechsel on the Effects of Political Pressure and Identifying Monetary Policy Shocks
Recent data reveals that when U.S. presidents exert political pressure on the Federal Reserve, significant swings in inflation often follow.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Matthew Pines on the Geopolitical and National Security Implications of Cryptocurrency Adoption
Expanding institutional cryptocurrency adoption could be a crucial strategy for helping curb the expansion of China’s growing digital authoritarianism across the globe.

- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Strengthening the Federal Reserve’s Accountability to the US Congress
Congress has a constitutional duty to oversee the Federal Reserve, but the complexity of its monetary policy has outpaced existing oversight tools. This brief looks at approaches for restoring the balance between the Fed’s independence and accountability.
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Travis Hill on the Discount Window, Receivership Funding, and Financial Tokenization
Establishing a new pre-positioning rule could be a novel solution that would help normalize and destigmatize the use of the discount window moving forward.

- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
Should The Fed Cut Rates? | WTAN Radio
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Catherine Pakaluk on *Hannah’s Children: The Women Quietly Defying the Birth Dearth*
As birth rates continue to decline around the globe, it’s important to recognize the wide range of benefits that come with having more children and larger families.

Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q2 2023
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
What Is the Monetary Standard? The Fed Should Tell Us
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
A New Coin of the Realm? Central Bank Digital Currency as New Public Money
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Transparency at Federal Reserve Banks
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Fifteen Years of Aggressive Discretionary Fiscal Policy
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
Nominal Income Expectations of Consumers
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q1 2023
- | Government Spending Government Spending
- | Policy Briefs Policy Briefs
Fiscal Dominance: How Worried Should We Be?
- | Monetary Policy Monetary Policy
- | Books Books
Alternative Approaches to Monetary Policy
Published at "TheMoneyIllusion"
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Why There Is a Need for a New Fed History in the Spirit of Friedman and Schwartz’s A Monetary History
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q4 2022
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Is the Quantity Theory Dead? Lessons from the Pandemic
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
What Kind of Landing: Soft or Hard?
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Federal Reserve’s Balance Sheet: Costs to Taxpayers of Quantitative Easing
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q3 2022
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Do Price Controls Work? Lessons from Hyperinflations under Dictatorial Regimes
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
The Fate of FAIT: Salvaging the Fed’s Framework
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Consumer Inflation Uncertainty Is Rising
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q2 2022
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Gas Prices, Inflation Expectations, and Consumer Sentiment
Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Emilio Ocampo on Dollarization and the State of the Argentine Economy
As Argentina’s economy continues to recover and rebound, transitioning to a dollarization policy may be the next step toward achieving economic revival.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Jonathon Hazell on the Costs and Causes of Inflation and the Phillips Curve Debate
When measuring the impacts of rising inflation on workers, it’s important to factor in the conflict costs associated with negotiating higher wages.

- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
The Performance of the Fed During the Recent Inflationary Cycle | The Society of Professional Economists’ “Econ Thoughts” (podcast)
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Thomas Drechsel on the Effects of Political Pressure and Identifying Monetary Policy Shocks
Recent data reveals that when U.S. presidents exert political pressure on the Federal Reserve, significant swings in inflation often follow.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Matthew Pines on the Geopolitical and National Security Implications of Cryptocurrency Adoption
Expanding institutional cryptocurrency adoption could be a crucial strategy for helping curb the expansion of China’s growing digital authoritarianism across the globe.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Travis Hill on the Discount Window, Receivership Funding, and Financial Tokenization
Establishing a new pre-positioning rule could be a novel solution that would help normalize and destigmatize the use of the discount window moving forward.

- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
Should The Fed Cut Rates? | WTAN Radio
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Catherine Pakaluk on *Hannah’s Children: The Women Quietly Defying the Birth Dearth*
As birth rates continue to decline around the globe, it’s important to recognize the wide range of benefits that come with having more children and larger families.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Stephen Miran on Activist Treasury Issuance and the Monetary Policy Implications of a Second Trump Term
While the actions of the Treasury have helped facilitate the Fed’s recent goals of achieving a soft landing, its potential political motivations in doing so should not be ignored.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Carola Binder on the History of Inflation, the Fed Framework Review, and the Promise of Nominal GDP Targeting
The history of inflation in the US provides the Fed and other policymakers plenty of lessons for how to more effectively stabilize prices as the economy continues to evolve.

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Stocks Rise as Federal Reserve Rates Expected To Be Cut | Global Catholic Television Network
- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
When Interest Rate Cuts Come, Where Will You Feel Them First? | Marketplace Radio
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Samim Ghamami on How to Reform the Treasury Market
Broadening access to the standing repo facility may be the most effective first step towards reforming the Treasury market.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Kyla Scanlon on the “Vibecession”, the Vibe Economy, and the Path to Growing American Wealth
As the US continues to navigate through the post-pandemic Vibecession landscape, it’s more important than ever to bridge the disconnect between the American people and their perception of the economy.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Sam Schulhofer-Wohl on How to Improve Treasury Market Resiliency
Implementing reliable central clearing or all-to-all trading are just a few potential options to consider for reforming the Treasury market.

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Wall Street Slumps and Worrying Signs | News Nightly
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Nicholas Anthony on *Digital Currency or Digital Control: Decoding CBDC and the Future of Money*
As an increasing number of central banks contemplate the implementation of CBDCs, it is crucial to balance the benefits they offer against the risks to financial privacy, cybersecurity, and overall economic freedom.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
James Bullard on FAIT, Nominal GDP Targeting, and the Fed’s Upcoming Framework Review
As the Fed approaches its next framework review, there are numerous modifications the central bank could consider to further enhance its current monetary policy framework.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Josh Lipsky on Financial Statecraft, Cross-border Payments, and the Global Status of the Dollar
Financial statecraft has been a crucial economic and geopolitical instrument in U.S. foreign policy and will continue to serve as an essential tool in the new era of digital currencies.

- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
Money Supply and Inflation: How They Relate | AIER’s “Econception”
Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Argentina’s Best Hope: Dollarization | City Journal
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Taking a Close Look at the Economic Situation: September 2023 | Groundbreak Carolinas
- | Government Spending Government Spending
- | Expert Commentary Expert Commentary
First Anniversary of Inflation Reduction Act | WSPD radio’s “The Scott Sands Show” (OH)
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Biden’s Union Support Could Get in the Way of His Industrial Policy | National Review’s “The Corner”
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Do Aging Politicians Help Explain the US Credit Rating Downgrade? | The Washington Examiner
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
US Downgrade: 20 Years of Erosion of Governance | National Review’s “The Corner”
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Money Supply Predicted Inflation’s Fall. Who’s Actually Surprised? | The Washington Examiner
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Solution to the Inflation-interpretation Debate | National Review
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Why We Don’t Need To Tolerate Higher Inflation | Tribune News Service
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Legacy of Trailblazing Economist Robert Lucas | Discourse
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Fed Has Overseen a Remarkable Transfer of Wealth From Bondholders to Taxpayers | Barron's
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
It’s Time for the Fed to Take a Breath | National Review
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Role of Sound Monetary Policy in an Abundance Agenda | Discourse
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
‘Team Permanent’ (Mostly) Won the Inflation Debate | National Review
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Money Supply Is Shrinking: The Fed Should Pay More Attention | National Review
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
What Would it Mean to Abolish the Bank of Canada? | EconLib
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Why Is It So Difficult To Achieve a Soft Economic Landing? | The Hill
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Monetary Conflation | EconLib
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
What is a Low Interest Rate Policy? | The Money Illusion
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary