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What LawMicro Has to Teach LawMacro: An Exploration of the Rule of Law and Monetary Policy

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  3. Journal of Contextual Economics – Schmollers Jahrbuch
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  5. pp. 1–16

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Boettke, P., Salter, A., Daniel, J. What LawMicro Has to Teach LawMacro: An Exploration of the Rule of Law and Monetary Policy. Journal of Contextual Economics – Schmollers Jahrbuch, 99999(), 1-16. https://doi.org/10.3790/schm.2024.375229
Boettke, Peter J.; Salter, Alexander William and Daniel, J. Smith "What LawMicro Has to Teach LawMacro: An Exploration of the Rule of Law and Monetary Policy" Journal of Contextual Economics – Schmollers Jahrbuch 99999., 2024, 1-16. https://doi.org/10.3790/schm.2024.375229
Boettke, Peter J./Salter, Alexander William/Daniel, J. Smith (2024): What LawMicro Has to Teach LawMacro: An Exploration of the Rule of Law and Monetary Policy, in: Journal of Contextual Economics – Schmollers Jahrbuch, vol. 99999, iss. , 1-16, [online] https://doi.org/10.3790/schm.2024.375229
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What LawMicro Has to Teach LawMacro: An Exploration of the Rule of Law and Monetary Policy

Boettke, Peter J. | Salter, Alexander William | Daniel, J. Smith

Journal of Contextual Economics – Schmollers Jahrbuch, Vol. (2024), Online First : pp. 1–16

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Article Details

Publisher Name
Duncker & Humblot
DOI
https://doi.org/10.3790/schm.2024.375229
Language
Multiple languages
Pages
16
Keywords

Author Details

Peter J. Boettke, Faculty of Economics, George Mason University Fairfax, USA

Alexander William Salter, Free Market Institute, Texas Tech University Rawls, USA

J. Smith Daniel, Department of Economics and Finance, Middle Tennesse State University , USA

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Abstract

Among LawMacro scholars, there is a growing interest in the incorporation of distributional goals into economic institutions and policies, especially central banks. We argue that this approach threatens to undermine the rule of law in monetary policy. This is troubling because the rule of law is necessary for maintaining monetary generality and predictability. Recent macroeconomic failures, such as the Financial Crisis and inflation following the Covid-19 pandemic, highlight the economic consequences of a lawless central bank. Unconstrained and discretionary central banking are only weakly democratically accountable, which raises legitimacy concerns with their pursuit of broader social agendas without explicit statutory authorization. We make the case for strengthening the rule of law to promote monetary generality and predictability and to better ensure democratic accountability.

Table of Contents

Section Title Page Action Price
Peter J. Boettke, Alexander William Salter, and Daniel J. Smith: What LawMicro Has to Teach LawMacro: An Exploration of the Rule of Law and Monetary Policy 1
1. Introduction 1
2. Foundations 6
2.1 Old Chicago 6
2.2 Ordoliberalism 7
2.3 Virginia 7
2.4 New Chicago 8
3. Why Rules Work 10
4. Conclusion 12
References 13

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