Has the Fed been a failure?

Selgin, George; Lastrapes, William D.; White, Lawrence H.

doi:10.1016/j.jmacro.2012.02.003

Cited by 106 publications

(22 citation statements)

References 147 publications

(113 reference statements)

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“…For instance, Romer (1986) and Davis (2004Davis ( , 2006 find that the Fed did not reduce economic volatility. Selgin, Lastrapes, and White (2012) and Hogan (2015) find that the Fed has not reduced monetary or macroeconomic instability. Both the National Banking System and the Federal Reserve System have flaws that can manifest in economically costly ways.…”

Section: B Some Historical Considerationsmentioning

confidence: 99%

“…While we agree with the critical attitude of these scholars, we believe skepticism is warranted not just with respect to the monetary policy performance of central banks, but the institution of discretionary monetary policy directed by a central bank itself . Institutional critiques of central banking call for embracing a broader political‐economic paradigm, to question seriously whether central banking as it is currently practiced is capable of achieving its intended goals, especially as they pertain to monetary policy (e.g., Boettke and Smith , ; Conti‐Brown ; Hogan ; Selgin, Lastrapes, and White ). Our analysis of the knowledge problems inherent in conducting monetary policy via a central bank contributes to the literature focused on institutional critique.…”

Section: Introductionmentioning

confidence: 99%

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What You Don't Know Can Hurt You: Knowledge Problems in Monetary Policy

Salter

Smith

2017

Contemporary Economic Policy

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Many economists hold that monetary policy missteps played a role in causing or prolonging the 2007–2008 financial crisis. In light of the perceived failure of monetary orthodoxy, models are being theoretically refined and empirically recalibrated. Absent from these technical debates is a recognition of the immense knowledge burdens inherent in monetary policy. We argue that Fed authorities do not have the knowledge required to achieve their own monetary objectives, given their inability to approximately measure or predict changes in the demand for money. Finally, we evaluate the ability of free banking to overcome this knowledge problem. (JEL E42, E52, E58, E61, P16)

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Section: B Some Historical Considerationsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

What You Don't Know Can Hurt You: Knowledge Problems in Monetary Policy

Salter

Smith

2017

Contemporary Economic Policy

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“…Since the early 1980s, the sources of the Great Moderation have been attributed to numerous causes including public policy, industry practices, technology, and even good luck (Goodfriend, 2011;Selgin et al, 2012;Ahmed, et al, 2004;The Federal Reserve Bond, 2004 (Friedman, 1970;Irwin, 2010;Irwin, 2011;Romer, 1992).…”

Section: Introduction (Great Depression Onward)mentioning

confidence: 99%

Chemical Industry and Chemist’s Jobs after the COVID-19 Pandemic: A Long-Term Prediction of Employment Outlook for Chemical Professionals

Guha¹,

Karim²,

Beni³

2020

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In March 2020, the whole world was impacted by the ripple effects of COVID-19 and was in the midst of battling this infectious disease. A global pandemic caused by a microscopic enemy, which outbroke in Wuhan, China, quickly spread, bringing the world's largest economies to a halt. As a consequence, the financial infrastructures of several countries have been severely damaged. In just 3 weeks, unemployment claims surpassed 16 million in the United States alone, which soared to over 40 million by the end of May 2020. This accounts for a jobless rate of over 24%, a record high in history. Production of chemicals that go into construction and consumer uses trended down in March, and continued plummeting downward in the following months. The chemical manufacturing sector showed a slight drop in employment rate. It is important to understand these broad trends in the demand for chemicals and unemployment in chemistry in the coming months and years. In an economic downturn, fewer people buy new houses and new cars, which decreases the demand for the chemicals that go into manufacturing them. The dramatic drops in the stock market will also affect the pharmaceutical sector. It may become harder for small biotech firms to raise money from investors and seed new positions in start-ups. For major chemical and pharmaceutical companies, if stock prices and quarterly results suffer, we may begin to see layoffs-a reversal of the hiring trends of the past few years. Academia will be affected as well. For many universities and colleges, the sudden disruption in the academic structure of the Spring 2020 semester is having an immediate financial impact. Hiring freezes have begun. However, the effects of the economic downturn on new tenure-track positions won't be clear until early Fall.

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“…Skepticism about the effectiveness of post-crisis policy changes is also not uncommon (Hetzel, 2008, 2012; Salter, 2014a, 2014b; Salter and Tarko, 2017; Sumner, 2012, 2015). Furthermore, the desirability of the current financial regulatory institutions in general has been attacked (Boettke and Smith, 2013, 2015a, 2015b; Hogan, 2015; Selgin et al , 2012). We agree with many of these critics, but we think that they lack the proper conceptual tools for analyzing viable alternatives.…”

Section: Introductionmentioning

confidence: 99%

Governing the banking system: an assessment of resilience based on Elinor Ostrom's design principles

Salter

Tarko

2018

Journal of Institutional Economics

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The problem of financial stability is political and institutional, rather than narrowly economic. To achieve a more resilient financial system, we need to pay attention to the incentives of actors who have the power to act discretionarily, and to the knowledge limitations of such actors in the face of substantial complexity and uncertainty. The literature on polycentric governance and institutional resilience provides key insights that the literature on financial stability has thus far neglected. We offer an analysis based on the “design principles” for robust governance institutions proposed by Nobel laureate Elinor Ostrom. We apply these principles to banking systems and explore under what conditions a banking system can be expected to discover rules that align private incentives with broader financial stability, and generate the necessary knowledge to govern such a complex system. This perspective challenges both “microprudential” and “macroprudential” approaches, which assume a monocentric financial and banking regulator.

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Has the Fed been a failure?

Cited by 106 publications

References 147 publications

What You Don't Know Can Hurt You: Knowledge Problems in Monetary Policy

What You Don't Know Can Hurt You: Knowledge Problems in Monetary Policy

Chemical Industry and Chemist’s Jobs after the COVID-19 Pandemic: A Long-Term Prediction of Employment Outlook for Chemical Professionals

Governing the banking system: an assessment of resilience based on Elinor Ostrom's design principles

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