As highlighted by David Henderson and Peter Boettke, markets and competition are like weeds, not delicate flowers. Economies recover even from severe boom-bust episodes and despite growth-retarding regime uncertainty. Even burdensome regulation, per Pierre Lemieux, causes a “slow-motion collapse” or stagnation, not a crash.

The Free Market 32, no. 12 (December 2014)

Throughout the existence of the Fed, its officers and intellectual supporters understandably asserted that the government’s movement toward central banking was a most beneficial evolution. In a 1948 issue of The Federal Reserve Bulletin, for example, Fed Chairman Thomas B. McCabe asserted that money production could not manage itself, so we need a central bank such as the Fed that acts for the public interest.

[This article is excerpted from the December issue of The Free Market, and is adapted from the fifth chapter of 2014’s The Fed at One Hundred, edited by David Howden and Joseph Salerno.]

Nicolas Cachanosky has recently released a very timely and well thought out working paper, “NGDP targeting: is five percent too much?” which should be of interest to all those  serious about improving the performance monetary institutions or at least in limiting the harm central control of money unleashes on economic activity. The abstract: