The Mysterious Case of the Misfiring Monetary Policy

By Karen Shaw Petrou

When former Fed Chairman Bernanke launched a new approach to U.S. monetary policy earlier this year, he prompted many within and outside the U.S. central bank to call for sweeping change that would solve the “mystery” Janet Yellen says bedevils post-crisis monetary-policy transmission.  Just like the blue carbuncle Sherlock Holmes eventually found inside a large goose, central bankers are searching for a new gemstone within reams of data by which to guide increasingly complex policy-transmission channels.  Continue reading “The Mysterious Case of the Misfiring Monetary Policy”

Should The Fed Become a “Social Wealth Fund?”

By Karen Shaw Petrou

On November 30, the New York Times ran an op-ed arguing that the Fed could make a big economic-equality difference by becoming, in essence, a giant equity holder on behalf of the nation’s least wealthy.  This concept takes Milton Friedman’s idea of “helicopter money” one step farther, creating “helicopter equity” in hopes of improving long-term wealth accumulation instead of the consumption for which Mr. Friedman wanted his dollars dropped from the sky.  From a progressive-policy perspective, turning the Fed into a giant, redistributive mutual fund has considerable appeal.  Continue reading “Should The Fed Become a “Social Wealth Fund?””