Wednesday, January 23, 2013

Monetary tensions

My column for the February issue of Research magazine is now online: "Political Stand-Offs." Much of it is about monetary policy. Excerpt:
In last year’s presidential primaries, hopefuls including Mitt Romney complained monetary policy was too loose. Rick Perry warned further easing would be “almost treasonous.” Ron Paul’s push to “end the Fed” was a keynote of his campaign, and Newt Gingrich praised Paul for being “right about the Federal Reserve for 25 years.”
The politics have been shuffled somewhat by the Federal Reserve’s stance, announced in December, of continuing bond purchases as long as unemployment stays above 6.5% and inflation is projected at below 2.5%. On one hand, such easing runs contrary to Republican calls for tight money and fears of inflation. On the other hand, it jibes well with another traditional Republican priority, for monetary policy to be more rule-based and predictable.
 Whole thing here.

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