Over the past two decades a group of us has developed an alternative approach to monetary theory that integrates the insights of Knapp's (1924) state money approach (also called chartalist and adopted by Keynes (1930, 1914)), the credit money view of Innes (1913, 1914), Lerner's (1943, 1947)...

Scott Fullwiler and Senior Scholar L. Randall Wray review the roles of the Federal Reserve and the Treasury in the context of quantitative easing, and find that the financial crisis has highlighted the limited oversight of Congress and the limited transparency of the Fed. And since a Fed promise...

Beyond its original mission to 'furnish an elastic currency' as lender of last resort and manager of the payments system, the Federal Reserve has always been responsible (along with the Treasury) for regulating and supervising member banks. After World War II, Congress directed the Fed to pursue...

This chapter utilizes the social fabric matrix approach (SFM-A) to provide a detailed description of the Federal Reserve's (Fed's) daily operations and the recent financial crisis. The SFM of the Fed's operations presents the primary components- major norms, institutions, technologies- relevant...

The severe economic downturn caused by the coronavirus disease (COVID-19) pandemic has forced governments worldwide to increase spending while tax revenues simultaneously collapsed. Concurrent with this, central banks in several of these countries are financing a significant percent of their...

This post considers whether a given deficit resulting in more reserves in circulation and fewer bonds held by the non-government sector raises the likelihood of spiraling inflation, as most interpretations of the government budget constraint (GBC) assume. The approach here recognizes the...

Those warning of “helicopter drops” of money by central bankers, as Ben Bernanke is often accused of doing in 2010, actually do not understand modern monetary operations. This post demonstrates that central bank operations generally are not helicopter drops, while fiscal operations in fact...

Financial innovations have reduced banks' reserve holdings. Some argue the Fed's ability to set interest rates might be compromised. This concerns arises from a misunderstanding of Fed operations. Regardless of the quantity of reserve balances, the Fed can always set its federal funds rate...