Fed economists defending interest on reserves have recently called on an unexpected quarter by reviving interest in Milton Friedman’s 1969 essay, “The Optimum Quantity of Money.”[1] As Ben Bernanke and Don Kohn put it, “Before the Fed paid interest on reserves, banks engaged in wasteful and inefficient…
The Cat's Out of the Bag In September, when current Fed chair Janet Yellen held a press conference announcing details of the Fed's normalization plan, yours truly insisted that that plan reflected the Fed's "determination to maintain its current, bureaucratically advantageous operating system," in which monetary policy…
During the Western Han Dynasty (206 B.C. – A.D. 9), the question of monetary freedom was vigorously debated. There were as yet no banks or paper money in China — money consisted solely of coin. Private mints competed with government mints, either in the shadow market or…
Dormant for a while, the debate over India’s demonetization program of last fall has been revived by new evidence. The new evidence on note returns and GDP vindicates the critics, and has the defenders in strategic retreat. To recap: On November 8, 2016, India’s Prime Minister Narendra…
I’ve begun working on a new book on the gold standard. In the first chapter I plan to discuss the origin of money, as a preliminary to discussing how silver and gold became the world’s dominant commodity monies. The topic of the origin of money has become…