Former Chief of the SDR Division at the IMF Warren Coats unpacks a statement by Senator Jeff Merkley that
“The Fed should be using its economic expertise to highlight the long-term devastating impacts of failing to provide the opportunity for the skills needed for the economy of the future.” 
Warren’s paper examines monetary management in the United States – since the Nixon shock of closing the gold window and launching wage and price controls – to research the statement above. He finds:
- No tradeoff exists between employment and inflation in the long run.
- Radical innovations in New Zealand sparked rules that ultimately fell short of expectations.
- NGDP targeting ignores the benefits of stable money.
- The return to a hard anchor for monetary policy – such as the SDR – is attractive.
Although CFS is not promoting the idea of a newfound use for the SDR, monetary policy is in need of a rethink. Warren’s ideas are thoughtful and informative.
To view the full paper:
As always, CFS welcomes opinion.
 Ylan Q. Mui, https://www.washingtonpost.com/news/wonk/wp/2016/08/26/liberals-fought-for-janet-yellen-to-lead-the-fed-now-they-hope-shes-more-more-ally-than-adversary/ The Washington Post Aug. 27, 2016