Current money matching models employ either random matching or endogenous matching processes, both of which oversimplify the problem. We maintain that although most economic interactions are intentional, randomness still exists in consumption preferences. We offer an endogenous matching model of...

The Federal Reserve regulates U.S. commercial banks using a system of risk-based capital (RBC) regulations based on the Basel Accords. Unfortunately, the Fed's misrating of several assets such as mortgage-backed securities encouraged the build-up of these assets in the banking system and was a...

Review of Stephanie Kelton, The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy.The ideas of Modern Monetary Theory (MMT) have gained popularity in certain political circles. While claiming to overturn well-known economic principles, MMT has never been formally laid...

We provide an initial assessment of the Federal Reserve's policy response to the COVID-19 contraction. We briefly review the historical episode and consider the standard textbook treatment of a pandemic on the macroeconomy. We summarize and then evaluate the Fed's monetary and emergency lending...

In this chapter, I compare the economic performance on the gold standard to that under central banking based on the growth and stability of prices and real production. I find that the Fed has not obviously outperformed the market-based gold standard. The price level was more predictable prior to...

Federal Open Market Committee (FOMC) decisions rely on economic forecasts from the Federal Reserve Board (FRB) staff. This paper analyzes the forecasts of GDP growth, inflation, and unemployment by the FRB staff and the FOMC from 2009 through 2016. Forecasts for the current year are positively...

This paper reviews the cost-benefit analysis, or "regulatory impact analysis" (RIA), in U.S. bank regulators' risk-based capital (RBC) rule proposals. We provide a brief background on RBC rules and review the literature on their costs and benefits. We evaluate 25 proposed RBC rules and related...

Economic projections by the Federal Open Market Committee (FOMC) were highly inaccurate in the years during and after the Great Recession. Using a model of collective prediction that weighs the ``wisdom of crowds'' against shared biases, we analyze GDP forecast errors in a panel dataset of FOMC...