OpenMarket: Monetary Policy

In advance of his testimony yesterday before the House Financial Services Committee, Federal Reserve Chairman Jerome Powell was the subject of a front-page story in The Wall Street Journal that touted his supposedly good relations with lawmakers of both parties. “Powell’s Support Inside Congress Is Deep,” read the Journal headline in the print edition.

More than ten years after the pseudonymous Satoshi Nakamoto published the source code for Bitcoin, and after hundreds of other cryptocurrencies have been introduced, Facebook is the latest entrant in the cryptocurrency market. Yesterday, Facebook launched a new digital currency called Libra that will attempt to combine a decentralized blockchain—the hallmark of successful cryptocurrencies—with the reach of the Facebook community.

Some economists do more than teach classes and write books. Alice Rivlin, who passed away this week, was proof. She was the first director of the Congressional Budget Office (CBO), from 1975 to 1983, serving under Presidents Ford, Carter, and Reagan. She helped develop many of the standards used for estimating how much legislation would cost if enacted. More importantly, she developed a reputation for keeping politicking out of the bill scoring.

Blockchain is a software architecture that seems very likely to unleash profound global forces if it crosses over into the mainstream.

To judge by its price, Bitcoin had a banner year in 2017. The leading cryptocurrency rose 1,200 percent against the dollar, making millionaires of many geek investors and billionaires of a few. But at one point, Bitcoin was up 1,800 percent. It dropped from the highest heights by year’s end, making some of the less...

It’s that special time of year when people think of family, friends, faith—and tax avoidance. Donations made to qualified charitable organizations during calendar year 2017 entitle you to a deduction against your income tax if you itemize in your 2017 tax filing. You can donate to CEI by going to the “Donate” link on CEI’s...

Asked about Bitcoin last week, economics Nobel laureate and Columbia University professor Joseph Stiglitz said, among other gems, “It ought to be outlawed. It doesn’t serve any socially useful function.”

His views have been widely panned by supporters of cryptocurrency, of course, and this post will be another example.

Stiglitz’s statement illustrates a subtle but very important slippage in the function of economics and economists, from students of human action to dictators of human behavior. The slip happens with concepts like “utility” or, as Stiglitz says, “socially useful function.”

Things are useful if they promote certain ends, and they are not useful if they don’t. The question is always what the ends are. Sometimes,...

The alternate currency known as Bitcoin has had a wild week, and its dramatic rise in value has meant that many Americans are hearing and learning about it for the first time.

The increase has been so dramatic, however, it has also caused many observers to express skepticism about the sustainability of these gains, generating comparisons, for example, to the legendary price bubble for Dutch tulip bulbs in the 17^th Century. As the Los Angeles Times colunist and...

Yesterday, a U.S. District Court in San Francisco ordered Bitcoin service provider Coinbase to comply with a dramatically scaled-back Internal Revenue Service summons for user information. CEI participated in the case by filing an amicus brief urging the court...

The Monday after Thanksgiving weekend, employees of the Consumer Financial Protection Bureau awoke to dueling acting directors: Leandra English and Mick Mulvaney.

English was designated deputy director by Obama-appointed...