With the inflation rate in the United States and many other countries on the rise for over a year and nearing double digits, the Hoover Institution hosted its 2022 conference on monetary policy. Policy makers, market participants, and academic researchers gathered to discuss the situation. Many agreed that low interest rates and high money growth were inappropriate given the high inflation rate and evidence that the United States has recovered from the deep recession induced by the pandemic and its policy response in 2020. The thoughtful papers and the thorough discussions in this volume of conference proceedings illustrate the debate about the reasons for this mismatch, as well as how to get back on track. They reflect a range of opinions and perspectives, including examination of the fiscal shock resulting from the COVID pandemic and the related borrowing and spending; emphasis on the value of adherence to rules versus discretion in setting Fed policy; lessons from history in the spikes in federal expenditures during times of war (including the pandemic) and in the timing of the Fed's use of its policy instruments; the role of central banks in the emerging inflation crisis; and s

Since the end of the Great Recession in 2009 the central banks of the advanced countries have taken unprecedented actions to reflate and stimulate their economies. There have been significant differences in the timing and pace of these actions. These independent monetary policy actions have had significant spillover effects on the economies and monetary policy strategies of other advanced countries. In addition the monetary policy actions and interventions of the advanced countries have had a significant impact on the emerging market economies leading to the charge of 'currency wars.' The perceived negative consequences of spillovers from the actions of national central banks has led to calls for international monetary policy coordination. The arguments for coordination based on game theory are the same today as back in the 1980s, which led to accords which required that participant countries follow policies to improve global welfare at the expense of domestic fundamentals. This led to disastrous consequences. An alternative approach to the international spillovers of national monetary policy actions is to view them as deviations from rules based monetary policy. In this view a return to rules based monetary policy and a rolling back of the "" global great deviation"" by each country's central bank would lead to a beneficial policy outcome without the need for explicit policy coordination. In this book we report the results from a recent conference which brought together academics, market participants, and policy makers to focus on these issues. The consensus of much of the conference was on the need for a classic rules based reform of the international monetary system.

In The Structural Foundations of Monetary Policy, Michael D. Bordo, John H. Cochrane, and Amit Seru bring together discussions and presentations from the Hoover Institution’s annual monetary policy conference. The conference participants discuss long-run monetary issues facing the world economy, with an emphasis on deep, unresolved structural questions. They explore vital issues affecting the Federal Reserve, the United States’ central bank. They voice concern over the Fed’s independence, governance, and ability to withstand future shocks and analyze the effects of its monetary policies and growing balance sheet in the wake of the 2008 financial crisis. The authors ask a range of questions that get to the heart of twenty-first-century monetary policy. What should the role of the Fed be? Which policies and strategies will mitigate the risks of the next crisis and at the same time spur innovation and job creation? How can new technology make the Fed’s payment system safer, faster, and more efficient? What does the emergence of crypto-currencies such as Bitcoin mean for competition and stability? How can the Fed defend itself against exploitation and politicization? Finally they propose reforms to ensure that the Fed will remain independent, stable, strong, and resilient in an unpredictable world.

During the twentieth century, foreign-exchange intervention was sometimes used in an attempt to solve the fundamental trilemma of international finance, which holds that countries cannot simultaneously pursue independent monetary policies, stabilize their exchange rates, and benefit from free cross-border financial flows. Drawing on a trove of previously confidential data, "Strained Relations" reveals the evolution of US policy regarding currency market intervention, and its interaction with monetary policy. The authors consider how foreign-exchange intervention was affected by changing economic and institutional circumstances--most notably the abandonment of the international gold standard--and how political and bureaucratic factors affected this aspect of public policy.

In response to the ongoing financial crisis, the U.S. government has significantly expanded its role in economy, resulting in new legislation and both public and private policy overhauls. But these hasty efforts to buoy the economy may ultimately do more harm than good. In No Way Out?, Vincent R. Reinhart and his coauthors provide a concise narrative of the financial crisis, the mismatched market incentives and government policies that precipitated it, and the likelihood of its recurrence. This volume is an indispensable resource for policymakers and financial leaders and a timely reminder that until we understand the history of government intervention in the marketplace, we are doomed to repeat failed policies.

As awareness of the process of globalization grows and the study of its effects becomes increasingly important to governments and businesses (as well as to a sizable opposition), the need for historical understanding also increases. Despite the importance of the topic, few attempts have been made to present a long-term economic analysis of the phenomenon, one that frames the issue by examining its place in the long history of international integration.
This volume collects eleven papers doing exactly that and more. The first group of essays explores how the process of globalization can be measured in terms of the long-term integration of different markets-from the markets for goods and commodities to those for labor and capital, and from the sixteenth century to the present. The second set of contributions places this knowledge in a wider context, examining some of the trends and questions that have emerged as markets converge and diverge: the roles of technology and geography are both considered, along with the controversial issues of globalization's effects on inequality and social justice and the roles of political institutions in responding to them. The final group of essays addresses the international financial systems that play such a large part in guiding the process of globalization, considering the influence of exchange rate regimes, financial development, financial crises, and the architecture of the international financial system itself.
This volume reveals a much larger picture of the process of globalization, one that stretches from the establishment of a global economic system during the nineteenth century through the disruptions of two world wars and the GreatDepression into the present day. The keen analysis, insight, and wisdom in this volume will have something to offer a wide range of readers interested in this important issue.

The importance of international considerations in the US Federal Reserve System's deliberations has become more and more important over time as global financial crises and events create ever stronger repercussions in the US economy. This book critically evaluates the role of the Federal Reserve System as a player in the international monetary system over the past one hundred years, starting with its initial responsibility under the gold standard and looking ahead to the challenges it will face in the twenty-first century under the fiat standard. The book is based on a conference of the same name held at the Federal Reserve Bank of Dallas in September 2014, as part of the Federal Reserve System's centennial, and contributors include many of the most highly regarded financial historians and policymakers.

The present global monetary regime is based on floating among the major advanced countries. A key underlying factor behind the present regime is credibility to maintain stable monetary policies. The origin of credibility in monetary regimes goes back to the pre-1914 classical gold standard. In that regime, adherence by central banks to the rule of convertibility of national currencies in terms of a fixed weight of gold provided a nominal anchor to the price level. Between 1914 and the present several monetary regimes gradually moved away from gold, with varying success in maintaining price stability and credibility. In this book, the editors present ten studies combining historical narrative with econometrics that analyze the role of credibility in four monetary regimes, from the gold standard to the present managed float.

Throughout their long history, the primary concern of central banks has oscillated between price stability in normal times and financial stability in extraordinary times. In the wake of the recent global financial crisis, central banks have been given additional responsibilities to ensure financial stability, which has sparked intense debate over the nature of their role. Bankers and policy makers face an enormous challenge finding the right balance of power between the central bank and the state. This volume is the result of an international conference held at Norges Bank (the central bank of Norway). International experts and policy makers present research and historical analysis on the evolution of the central bank. They specifically focus on four key aspects: its role as an institution, the part it plays within the international monetary system, how to delineate and limit its functions, and how to apply the lessons of the past two centuries.

Controlling inflation is among the most important objectives of economic policy. By maintaining price stability, policy makers are able to reduce uncertainty, improve price-monitoring mechanisms, and facilitate more efficient planning and allocation of resources, thereby raising productivity.
This volume focuses on understanding the causes of the Great Inflation of the 1970s and '80s, which saw rising inflation in many nations, and which propelled interest rates across the developing world into the double digits. In the decades since, the immediate cause of the period's rise in inflation has been the subject of considerable debate. Among the areas of contention are the role of monetary policy in driving inflation and the implications this had both for policy design and for evaluating the performance of those who set the policy. Here, contributors map monetary policy from the 1960s to the present, shedding light on the ways in which the lessons of the Great Inflation were absorbed and applied to today's global and increasingly complex economic environment.

The present global monetary regime is based on floating among the major advanced countries. A key underlying factor behind the present regime is credibility to maintain stable monetary policies. The origin of credibility in monetary regimes goes back to the pre-1914 classical gold standard. In that regime, adherence by central banks to the rule of convertibility of national currencies in terms of a fixed weight of gold provided a nominal anchor to the price level. Between 1914 and the present several monetary regimes gradually moved away from gold, with varying success in maintaining price stability and credibility. In this book, the editors present ten studies combining historical narrative with econometrics that analyze the role of credibility in four monetary regimes, from the gold standard to the present managed float.

This book contains essays presented at a conference held in November 2010 to mark the centenary of the famous 1910 Jekyll Island meeting of leading American financiers and the US Treasury. The 1910 meeting resulted in the Aldrich Plan, a precursor to the Federal Reserve Act that was enacted by Congress in 1913. The 2010 conference, sponsored by the Federal Reserve Bank of Atlanta and Rutgers University, featured assessments of the Fed's near 100-year track record by prominent economic historians and macroeconomists. The final chapter of the book records a panel discussion of Fed policy making by the current and former senior Federal Reserve officials.

This important contribution to comparative economic history examines different countries' experiences with different monetary regimes, laying particular emphasis on how the regimes fared when placed under stress such as wars or other changes in the economic environment. Covering the experience of ten countries over the period 1700-1990, the contributors employ the latest techniques of economic analysis in their studies. Several papers are concerned with the transformation from bimetallism to gold monometallism in the nineteenth century and the determinants of monetary regimes transformation in the core countries of Britain, France and the United States. Others focus on the successful and unsuccessful gold standard experiences of Canada, Australia, and Spain, while yet others examine the experience of wartime and postwar stabilizations surrounding the two World Wars and the Napoleonic War.

This book contains a collection of essays comparing the evolution of the fiscal and monetary regimes of the Old World colonial powers - England, France, Spain, Portugal and the Netherlands - from the seventeenth to the nineteenth centuries with the experiences of several of their former colonies in the New World of the Americas: the United States, Canada, Mexico, Colombia, Brazil and Argentina. The objective is to see how such fiscal and monetary institutions were modified or replaced by new ones. The case studies in the collection consider the experience of the colonies after they became independent countries; they examine the factors that allowed efficient fiscal institutions to develop in some countries, while in others such development turned out to be unsuccessful; and they consider why some governments were able to live within their means and provide public goods, while for others expenditures frequently exceeded revenue, often leading to fiscal crises.

This book contains a collection of Michael D. Bordo's essays, written singly and with colleagues, on the classical gold standard and related regimes based directly or indirectly on gold convertibility. The gold standard (and its variants) was the basis for both international and domestic monetary arrangements from the third quarter of the nineteenth century until 1971 when President Nixon closed the US gold window, effectively ending the Bretton Woods International Monetary System. Although the gold standard and its variants are now history, it still has great appeal for policymakers and scholars. Several desirable features of the gold standard have resources for the ongoing issue of international monetary reform. They include its record as a stable nominal anchor; its automaticity; and its role as a credible commitment mechanism. The essays in this collection are organized around several themes: gold and the international monetary system; the commodity theory of money; the gold standard as a rule; variants of the gold standard including the interwar gold standard and the Bretton Woods International Monetary System.

This book is a collection of articles by eminent economic historians from five European colonial powers and from six New World countries. The articles focus on the legacy of the Old World fiscal institutions (taxes and expenditures) and monetary institutions (currency and banking) for the New World from the seventeenth to the nineteenth century. Did the success or failure of the New World's institutions in the independent countries reflect the foundations and the flaws of the former colonial masters or adaptation to the new environment?

This book contains a collection of Michael D. Bordo's essays written singly and with colleagues on the classical gold standard and related regimes based directly or indirectly on gold convertibility. The gold standard (and its variants) was the basis for both international and domestic monetary arrangements from the third quarter of the nineteenth century until 1971 when President Nixon closed the US gold window, effectively ending the Bretton Woods International Monetary System. Although the gold standard and its variants are now history, it still has great appeal for policymakers and scholars.

This important contribution to comparative economic history examines different countries' experiences with different monetary regimes. The contributors lay particular emphasis on how the regimes fared when placed under stress such as wars and/or other changes in the economic environment. Covering the experience of ten countries over the period 1700-1990, the book employs the latest techniques of economic analysis in order to understand why particular monetary regimes and policies succeeded or failed.

Throughout their long history, the primary concern of central banks has oscillated between price stability in normal times and financial stability in extraordinary times. In the wake of the recent global financial crisis, central banks have been given additional responsibilities to ensure financial stability, which has sparked intense debate over the nature of their role. Bankers and policy makers face an enormous challenge finding the right balance of power between the central bank and the state. This volume is the result of an international conference held at Norges Bank (the central bank of Norway). International experts and policy makers present research and historical analysis on the evolution of the central bank. They specifically focus on four key aspects: its role as an institution, the part it plays within the international monetary system, how to delineate and limit its functions, and how to apply the lessons of the past two centuries.

The importance of international considerations in the US Federal Reserve System's deliberations has become more and more important over time as global financial crises and events create ever stronger repercussions in the US economy. This book critically evaluates the role of the Federal Reserve System as a player in the international monetary system over the past one hundred years, starting with its initial responsibility under the gold standard and looking ahead to the challenges it will face in the twenty-first century under the fiat standard. The book is based on a conference of the same name held at the Federal Reserve Bank of Dallas in September 2014, as part of the Federal Reserve System's centennial, and contributors include many of the most highly regarded financial historians and policymakers.

Modern monetary economics has been significantly influenced by the knowledge and insight brought to the field by the work of Anna J. Schwartz, an economist whose career has spanned almost half a century. Her contributions evidence a broad expertise in international history and policy, and an ability to apply the results of her careful historical research to current issues and debates. "Money in Historical Perspective" is a collection of sixteen of her papers selected by Michael D. Bordo and Milton Friedman. Grouped into three sections, the essays constitute a number of Dr. Schwartz's most cited articles on the subject of monetary economics, many of which are no longer readily accessible.
In the papers in part I, dating from 1947 to the present, Dr. Schwartz examines money and banking in the United States and the United Kingdom from a historical perspective. Her investigation of the historical evidence linking economic instability to erratic monetary behavior2;this behavior itself a product of discretionary monetary policy2;has led her to argue for the importance of stable money, and her writings on these issues over the last two decades form part II. The volume concludes with four recent articles on international monetary arrangements, including Dr. Schwartz's well-known work on the gold standard.
This volume of classic essays by Anna Schwartz will be a useful addition to the libraries of scholars and students for its exemplary historical research and commentary on monetary systems.