Populism and the Future of the Fed

"This book brings together some of the greatest thought leaders and monetary policy scholars to examine how the Fed is being politicized and what that means for our economy." -Jeb Hensarling, Former Chairman, House Financial Services Committee

The 2008 financial crisis and the Covid-19 pandemic greatly expanded the Fed's scope and power. Populism and the Future of the Fed features highly readable essays that avoid technical jargon and provide a broad perspective on core issues-including the populist challenge to Fed independence, fiscal dominance and the return of inflation, the limits of Fed power versus the expansion of its dual mandate, and the strange world of helicopter money and fiscal QE.

One could argue that those who want the Fed to allocate credit, help fund a Green New Deal, engage in helicopter drops, and so on, are well intentioned. However, the real issue is whether such actions are consistent with long-run price stability and the rule of law.

Thus, several questions come to mind. What are the limits to what the Fed can do and what it should do in a free society? Where do we draw the line between fiscal and monetary policy? Do we want an activist central bank with wide discretion or a limited central bank guided by a monetary rule? What are the risks populism poses for the conduct of monetary policy, Fed independence, and central bank credibility? And can the Fed control inflation if populism and fiscal QE become pervasive?

The distinguished contributors to this volume address those questions in a clear and compelling manner that will help improve both policymakers' and the public's understanding of the complex relationship between politics, policy, and the rule of law.