The Fed’s Institutional Design

by Gerald P. O’Driscoll, Jr.[1] I have been reading Central Bank Governance & Oversight Reform, edited by John H. Cochrane and John B. Taylor. It is a conference volume of unusually high quality with all the discussions of presentations included. I plan to write more about the book later, but to highlight one chapter here. … Continue reading The Fed’s Institutional Design

Is the Fed Independent?

by Mario Rizzo In today's Wall Street Journal frequent contributor to ThinkMarkets, Jerry O'Driscoll, has an important opinion piece, "Why the Fed Is Not Independent." There has been much discussion recently of the importance of "preserving" Fed independence. But is the Fed independent? Independent of what? Jerry concentrates on the link between the Fed's monetary … Continue reading Is the Fed Independent?

What Peter Diamond Doesn’t Understand

by Mario Rizzo I read with interest Peter A. Diamond’s opinion piece in The New York Times, “When a Nobel Prize Isn’t Enough.” Professor Diamond, by all accounts a very competent economist at MIT, is complaining that he really IS qualified to be a member of the Board of Governors of the Federal Reserve System. … Continue reading What Peter Diamond Doesn’t Understand

The Fed Has No Clothes

by Jerry O’Driscoll   Philadelphia Fed President Charles Plosser gave a major speech on Monday at the Central Bank of Chile.  In the polite language of central bankers, the speech constitutes a systematic criticism of not only current Fed policy but of the Fed’s entire response to the financial crisis. Plosser’s speech updates Milton Friedman’s 1967 … Continue reading The Fed Has No Clothes

Taylor, Krugman and Quantitative Easing

by Chidem Kurdas In two substantial New York Review of Books articles, Paul Krugman and Robin Wells offer their views on various explanations of the property bubble and ways to get out of the slump.  On the latter front, they advocate aggressive deficit spending by the federal government and  quantitative easing by the Federal Reserve— … Continue reading Taylor, Krugman and Quantitative Easing

The European Central Bank Turns into the Fed?

by Andreas Hoffmann* The European Central Bank (ECB) and the Fed differ in many aspects. First, the ECB is considered to be more hawkish on fighting inflationary tendencies. Its primary goal is price stability and it has continued to watch money growth. Output gaps below full-employment are only considered secondary as instrument to forecast inflation. … Continue reading The European Central Bank Turns into the Fed?