Since Barnett derived the user cost price of money, the economic theory of monetary services aggregation has been developed and extended into a field of its own with solid foundations in microeconomic theory. Divisia monetary aggregates have repeatedly been shown to be strictly preferable to...

Many commentators have argued that if the Federal Reserve had followed a stricter monetary policy earlier this decade when the housing bubble was forming, and if Congress had not deregulated banking but had imposed tighter financial standards, the housing boom and bust - and the subsequent...

Analyzing inflation as a change in the value of a currency, rather than changes in prices of goods and services, provides perspective on three fundamental sources of inflation.A Money Value Formula produces a significant statistical fit with forward long-term inflation rates using long lags of...

Central banks repo market operations and liquidity infusions occasion a structural liquidity mismatch in bank balance sheets and increase the dependence on central bank liquidity. This paper argues for what I term “Circular Monetary Economics”, an approach to monetary policy that seeks to...

An alternative formula to the Quantity Theory uses monetary aggregates to measure changes in the value of money which explain virtually all variation of future long-term inflation, enabling significantly more accurate inflation forecasts than consensus with important implications for monetary...

Low and unresponsive inflation has been termed a “puzzle.” The paper describes a formula for which these conditions have been a prediction since early 2016.The Money Value Formula analyzes the unit value of a currency solely as a function of long lags of monetary aggregates. The Formula...

Since Barnett derived the user cost price of money, the economic theory of monetary services aggregation has been developed and extended into a field of its own with solid foundations in microeconomic theory. Divisia monetary aggregates have repeatedly been shown to be strictly preferable to...

Low and unresponsive inflation has been termed a “puzzle.”. The paper combines a monetary model and a growth model to explain low inflation and project its continued decline.The monetary model forecast in 2016 central banks would fail to reach 2% targets, which has been true. The model...

The paper examines a wide variety of models forecasting inflation, consumer survey, professional survey, judgmental, market-derived, and monetary model. Despite differences between forecasting approaches, models produced generally similar results. Long-term forecasts were more accurate than...

The three-equation New-Keynesian model advocated by Woodford (2003) as a self-contained system on which to base monetary policy analysis is shown to be inconsistent in the sense that its long-run static equilibrium solution implies that the interest rate is determined from two of the system’s...