Wednesday, 18 October 2017

Author Archives Thomas L. Hogan

Wars and the pre-Fed economy

Posted by Thomas L. Hogan
April 8, 2015
in Blog

Many economists assume that the Fed has improved U.S. economic performance relative to the pre-Fed periods. As I discussed in a previous blog post, however, the Fed has been better on some margins and worse on others. Most improvements under the Fed have only come since about 1985 during the Great Moderation. Another aspect that […]

Read More

Deposit insurance and monetary stability

Posted by Thomas L. Hogan
March 18, 2015
in Blog

Government deposit insurance from the Federal Deposit Insurance Corporation (FDIC) is intended to stabilize the financial system by preventing bank runs and financial contagion. As discussed in a previous blog post, however, most evidence indicatest hat  deposit insurance actually increases bank failures. When bank depositors are insured, banks face less monitoring and tend to take […]

Read More

Sound money and banking

Posted by Thomas L. Hogan
February 23, 2015
in Blog

What role does banking play in a theory of sound money? Banks in the United States are regulated by several agencies, especially the Fed. But should the Fed really regulate the banking system? Can the Fed effectively regulate the banking system? Regulators claim central banks have always run the banking system. Ben Bernanke, for example, […]

Read More

Will the ECB save Greece?

Posted by Thomas L. Hogan
February 2, 2015
in Blog

Following its recent elections, the government of Greece has requested a “haircut” or reduction in the interest rate it must pay on the 320 billion euros in debt it owes to the European Central Bank (ECB). Greek banks have also asked the ECB for a bailout which, for the moment, it is denying. Much of […]

Read More

Rules and directions

Posted by Thomas L. Hogan
January 14, 2015
in Blog

Ben Bernanke once got lost on his way to a meeting in Washington, D.C. When Bernanke stopped to ask for directions, the exchange went something like this: Bernanke: I seem to be lost and was wondering if you could point me in the right direction. Stranger: Sure. Where are you headed? Bernanke: It doesn’t matter […]

Read More

Common criticisms of the gold standard

Posted by Thomas L. Hogan
December 29, 2014
in Blog

Many mainstream economists believe that adopting a gold standard would be an economic disaster. But most of their objections appear to be inconsistent with the actual historical evidence. My new working paper, “Ben Bernanke and the Gold Standard,” co-authored with Robin Aguiar-Hicks and Daniel Smith, considers many economists’ common beliefs about the gold standard to […]

Read More

Economic performance and the Federal Reserve

Posted by Thomas L. Hogan
December 8, 2014
in Blog

Many economists argue the Fed can improve economic performance by moderating booms and busts in the economy. Indeed, some studies propose that the volatility of GDP growth has declined under the Fed, especially during the “Great Moderation” from the mid-1980s to the present day. My recent paper “Has the Fed Improved U.S. Economic Performance?”, soon […]

Read More

Central banking and central planning

Posted by Thomas L. Hogan
November 24, 2014
in Blog

Last week in the Wall Street Journal, Paul Kupiec argued that the Fed’s new emphasis on “macroprudential” management is basically central planning and is likely to decrease financial stability and slow economic growth. A similar argument was made a few years back by Jeffrey Hummel (here) and debated by David Glasner (here) and Kurt Schuler […]

Read More

Do higher reserves reduce bank risk?

Posted by Thomas L. Hogan
November 10, 2014
in Blog

During the 2008 financial crisis, many banks became illiquid and did not have enough cash reserves to pay their debts. The Fed responded to the liquidity shortage by paying banks to hold more reserves. The policy of paying interest on reserves (IOR) is intended to make banks safer, but can higher reserves actually increase risk? […]

Read More

Why isn’t monetary policy working?

Posted by Thomas L. Hogan
October 20, 2014
in Blog

Since 2008, the Fed’s quantitative easing (QE) programs have added more than $4 trillion to the U.S. economy with little noticeable effects. Why isn’t QE working? One issue is that the Fed is paying banks to hold higher cash reserve balances, a policy known as “interest on reserves” (IOR). This policy is intended to make […]

Read More

Did regulation cause the great recession?

Posted by Thomas L. Hogan
October 10, 2014
in Blog

John Cochrane recently wrote that Milton Friedman and Ben Bernanke were wrong to claim the Great Depression was caused by a shortage of money. He called the idea “unintentionally hilarious” and said it “gets the correlation vs. causation gold star.” Ok, not really. Cochrane actually said these things regarding a column at Forbes.com by Lois […]

Read More

What is monetary policy?

Posted by Thomas L. Hogan
September 2, 2014
in Blog

Thanks to the Atlas Network for inviting me to join the Sound Money Project blog. I want to start by discussing a question that may seem obvious but can actually be somewhat complicated: “What is monetary policy?” Or, more specifically, “when is monetary policy loose or tight?” Consider the debate between Scott Sumner and John […]

Read More