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| EST. READ TIME 1 MIN.Money and Monetary Policy for the 21st Century
This essay challenges the conventional wisdom about money and monetary policy. The role of money in fostering prosperity is a function of the quality, as well as the quantity, of money. Inflation always harms the performance of an economy. Deflations caused by productivity and innovation can be virtuous. A definition of a non-inflationary environment is set forth. Rapid real growth and low unemployment cannot cause inflation. There is no trade-off between inflation and employment. Higher commodity prices or weak exchange rates can't cause inflation. High market interest rates are a symptom of inflationary policies. Low interest rates are a reflection of successful anti-inflationary policies, not easy money.
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Jerry Jordan
President, Pacific Academy for Advanced StudiesJerry Jordan became president and chief executive officer of the Federal Reserve Bank of Cleveland in March 1992 and retiredin January 2003. In his capacity of the President of the Reserve Bank of Cleveland, he was a member of the Fed Open Market Committee which is responsible for setting Fed's interest rates.Mr. Jordan worked in government, academia, commercial banking, and previously in the Federal Reserve System. After receiving a Ph.D. in economics at U.C.L.A., he was employed at the Federal Reserve Bank of St. Louis, rising to the position of senior vice president and director of research. While at the St. Louis Fed, he was on leave to serve as a consultant to the Deutsche Bundesbank in Frankfurt.Mr. Jordan's commercial banking experience includes five years at Pittsburgh National Bank and seven years at First Interstate Bancorp in Los Angeles. Mr. Jordan served as a Member of President Reagan's Council of Economic Advisers in 1981-82, during which time he was also a member of the U.S. Gold Commission. Preceding and following his service in Washington, he was dean of the R.O. Anderson School of Management at the University of New Mexico.In 1997, Mr. Jordan received an honorary doctor of economics degree from Denison University and in 2001 an honorary doctor of business degree from Capital University. He is a member of the Mont Pelerin Society, the Academic Advisory Council of The Institute of Economic Affairs in London, and the Business Advisory Board of the Reason Foundation. He is also a senior fellow at The Fraser Institute, an adjunct scholar at the Cato Institute and a past president of the National Association of Business Economists.… Read more