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Chair of Monetary Policy
Contributor's Links: The Money Illusion

Scott Sumner is the Ralph G. Hawtrey Chair of Monetary Policy at the Mercatus Center at George Mason University.  He is also Professor Emeritus at Bentley University and Research Fellow at the Independent Institute. In his writing and research, Sumner specializes in monetary policy, the ... more

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Monetary Economics: The Three Heresies
In the wake of the Great Recession, the field of monetary economics has developed at least three heresies—schools of thought that reject mainstream monetary models.
Reforming Unemployment Insurance
People rarely stop to think about just how bizarre our unemployment insurance system actually is.
Identifying Monetary Policy Shocks
People generally visualize monetary shocks as a univariate phenomenon, perhaps a change in the short-term interest rate, or a change in the monetary base. Up or down.
Living On A One Dimensional Planet
In a closed economy model you can replace the exchange rate with the money supply, the price of gold, CPI futures prices, or NGDP futures prices.
Lockdowns Are Mostly Endogenous
Roughly 99% of people think lockdowns are a restrictive Covid-19 policy. I hope to convince you that lockdowns are mostly endogenous.
Hard Money Is Giving Us Socialism
Over the past few years, I’ve occasionally done some posts with titles like “Inflation of socialism?” It’s now clear that society has decided on socialism. So how did we get here?
The Fed Is Unlikely To Monetize The Debt
With the recent explosive growth in the Fed’s balance sheet, there’s been a lot of misleading discussion of the Fed “monetizing the debt”.
The Bizarre Data Continues
In May, retail sales regained about 80% of the losses from March and April. That’s in one month! In contrast, even a year after the trough in retail sales in March 2009, retail sales had recovered only about half the losses.
Stop Asking The Fed About Inequality (And Start Asking About Inflation)
Actually, inequality is a long run issue and the Fed cannot do anything to address the problem. Money is neutral in the long run.
Bearish Long Run Fed Forecasts Are Hawkish Policy
The Fed expects prices to rise by 4.2% between 2019 and 2022, assuming appropriate policy, far below the 6% increase they have targeted. They have provided no explanation as to why this policy stance is appropriate.
Way Too Tight
The Fed’s new inflation and unemployment projections show that monetary policy is currently way too tight. Unemployment is projected to remain high through 2022.
What Does It Mean To Say A Debt Is “Unsustainable”?
The most efficient fiscal policy is one that smooths tax rates over time, as high taxes are a drag on the economy.
Happy Days Are Here Again (Never Underestimate The Stock Market)
I made a post discussing the stock market’s failure to correctly anticipate the impact of COVID-19. More recently, there has been widespread puzzlement as to what’s causing the rally in stock prices. We have an answer to all of these questions.
The Fed Cannot Allow Another Lost Decade
There’s no reason why the Fed should allow the current pandemic to reduce inflation by 0.25%/year for the next 10 years.
Will We Have A Depression?
Unemployment rose from 3.5% in February to 14.7% in April, and many expect it to hit 20% in May. You could easily argue that the economy has already in fact “slipped into depression”.
Why Are Stocks Doing Well?
I’d like to consider some possible reasons why stocks have rallied to relatively high levels by historical standards, despite an economy that appears headed for 20% unemployment.
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