Allan H. Meltzer: A Life Well Lived (1928-2017)

The objective of policy rules is to reduce the uncertainty that the community must bear, not to prevent voluntary risk taking.Allan was open-minded and was willing to change his policy advice based on logic and evidence.He continued to participate in Cato ’s Annual Monetary Conference for many years and contributed 15 articles to theCato Journal (see Table 1). Although he was often critical of Fed policy, he thought Paul Volcker was correct in ending double-digit inflation by slowing the growth of money and credit, and that Alan Greenspan was correct in following an implicit monetary rule to prevent wide fluctuations in nominal income during the “Great Moderation.”Meltzer, however, was highly critical of the Fed ’s unconventional monetary policy and wrote in theSpring/Summer 2012Cato Journal:Overresponse to short-run events and neglect of longer-term consequences of its actions is one of the main errors that the Federal Reserve makes repeatedly. The current recession offers many examples of actions that some characterize as bold and innovative. I regard many of these actions as inappropriate for an allegedly independent central bank because they involve credit allocation, fill the Fed ’s portfolio with an unprecedented volume of long-term assets, evade or neglect the dual mandate, distort the credit markets, and initiate other actions that are not the responsibility of a central bank.He kept up his criticism until the end, writing articles for the Hoover Institute, ...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs