On July 29, 1981, barely six months into his presidency and in the face of an economic crisis of historic proportions, Ronald Reagan succeeded in persuading both houses of Congress to pass dramatic tax cuts that set the stage for nearly three decades of vigorous economic growth...
The President should take a page from Francois Mitterand. . . .
Peter Berkowitz on The Moral Consequences of Growth by Benjamin M. Friedman and The Pro-Growth Progressive: An Economic Strategy for Shared Prosperity by Gene Sperling
Douglas Irwin, professor of economics at Dartmouth College, explains and defends free trade.
President Obama, the press, all the Democrats and a fair number of the Republicans in Congress share the same assumption about health care...
Thomas Sowell analyzes the recent housing boom and bust, beginning with the underlying economic causes that artificially inflated housing costs in certain markets.
After introducing the opposing approaches to economics of John Maynard Keynes and Milton Friedman, economists Richard Epstein and John Taylor discuss U.S. monetary policy from the 1970s onward. . . .
This past week, New York Times columnist David Brooks climbed unwittingly into the ring to go a couple of rounds with Milton Friedman--or rather, since Friedman died just over two years ago, with the ghost of Milton Friedman...
As part of the inaugural Hoover Institution Library and Archives’ Workshop on Political Economy, Professor Angus Burgin of Johns Hopkins University gave the keynote lecture titled "Hayek, Friedman, and the Return of Laissez-Faire."
In the long run, there are no good bets against globalization
Matt Ridley, author of The Rational Optimist, insists that we humans must face the truth about ourselves—no matter how good it might be. An interview with Peter Robinson.
Hoover fellow Michael Spence ponders India, China, and the one essential element in economic growth: innovation. An interview with Peter Robinson.
The Nobel economist says the health-care bill will cause serious damage, but that the American people can be trusted to vote for limited government in November. . . .
Hoover fellow Gary S. Becker is convinced that Americans don’t really want to go backwards on economic liberty. By Peter Robinson.
In July 1944, delegates from forty-four nations gathered in Bretton Woods, New Hampshire, to design a postwar international monetary system that would promote world trade, investment, and economic growth. The framers created the International Monetary Fund (IMF or fund) to supervise the new "Bretton Woods monetary regime" that sought to keep national currencies convertible at stable exchange rates and to provide temporary, low-cost financing of balance-of-payments deficits resulting from misaligned exchange rates.
In reality, the framers of the Bretton Woods regime created an international price-fixing arrangement enforced by the IMF. After joining the fund, each member country declared a value for its currency relative to the U.S. dollar. The U.S. Treasury, in turn, tied the dollar to gold by agreeing to buy and sell gold to other governments at $35 an ounce; the inflation of the 1960s, however, made the U.S. commitment to sell gold at that price unsustainable. To preserve U.S. gold reserves, President Richard Nixon closed the gold window in August 1971, effectively uncoupling the dollar from gold and ending the fund's original mission of supervising a system of pegged exchange rates. Looking for a new mission, the IMF quickly evolved into a financial medic for developing countries. Beginning in the early 1970s, the IMF skillfully used a series of global economic crises to increase its capital base and financing activities.
Has the expansion of IMF financing activities alleviated the balance-of-payments problems of member countries and encouraged prudent, progrowth economic policies? The evidence, much of it supplied by the IMF, demonstrates that the fund does more harm than good. Historical studies as well as recent initiatives in Mexico, East Asia, and Russia reveal that IMF financing programs, which rarely prescribe appropriate economic policies or sufficient institutional reforms, are at best ineffective and at worst incentives for imprudent investment and public policy decisions that reduce economic growth, encourage long-term IMF dependency, and create global financial chaos.
It is time to scrap the IMF and strengthen market-based alternatives that would promote an orderly and efficient international monetary system. Key reforms include floating exchange rates, internationally accepted accounting and disclosure practices, unfettered private financial markets, and fundamental legal, political, and constitutional rules that would allow free markets to emerge and countries to achieve self-sustaining economic growth and development.