My work in this area has two major themes:
• The design and operation of self-regulating monetary systems: I have long been interested in how we might build on the Irving Fisher’s ‘compensated dollar’ and Milton Friedman’s commodity-reserve currency proposal to produce a fully feasible self-regulating monetary system that would control inflation automatically, without the need for ‘management’ or discretionary decision-making by central bank ‘controllers’. It seems to me that the key to getting this right is to use price-level or inflation derivatives: whoever issues currency would then peg the price of a suitably chosen derivative. My main work on this subject is to be found in Competition and Finance, “A proposal to end inflation”, and “An almost ideal monetary rule”. In retrospect, I think these suggestions are along the right lines, but there is more work to do yet ...
• Free-market monetary systems: The evolution and operation of monetary system free of government or other outside intervention.
There are also two secondary (and unconnected) interests:
• Euro-monetary reform, and the (unfortunately, failed) attempt to prevent the establishment of a European central bank
• The inflation fan charts: the construction, representation and evaluation of models that attempt to forecast future inflation uncertainty.
Presentation
"The Political Economy of Central Bank Digital Currencies: Towards a Technofascist Dystopia." Presentation to the Institute of International Monetary Research seminar on Central Bank Digital Currencies, University of Buckingham, 21 July 2021.
Books
Money and the Market: Essays on Free Banking. London and New York: Routledge, November 2000. 226 pp. Hardback.
Competition and Finance: A New Interpretation of Financial and Monetary Economics. Basingstoke: Macmillan Press; and New York: St. Martin’s Press, 1996, 572 pp. Hardback and paperback.
[A Chinese language edition of Competition and Finance was published by China Renmin University Press in 2005.]
Current Issues in Monetary Theory and Policy. (Edited by K. Dowd and M. K. Lewis.) London, Macmillan Publishers, 1992, 232 pp. Hardback and paperback.
The State and the Monetary System. Oxford: Philip Allan Publishers; and New York: St. Martin’s Press. 1989. 212 pp. Hardback and paperback.
Private Money: The Path to Monetary Stability. Hobart Paper No. 112, Institute of Economic Affairs, London, 1988, 71 pp. Second edition, 1996.
[An revised Italian version was published by the Istituto Bruno Leoni in October 2009 under the title Abolire le Banche Centrali with a preface by Franco Spinelli.]
Money and the Nation State: The Financial Revolution, Government and the World Monetary System. (Edited by K. Dowd and R. H. Timberlake, Jr., with a Foreword by Merton H. Miller.) Published by Transaction Publishers (New Brunswick, NJ) under the auspices of the Independent Institute (Oakland, CA), 1998. 453 pp. Hardback and paperback.
Book Review
Review of The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy by Stephanie Kelton. New York: Public Affairs, 2020. Cato Journal, Vol. 40, Number 3, Fall 2020, pp. 795-809.
Articles on Monetary Policy
"Central Bank Activism: Good Intentions, Bad Policy." Pp. 255-270 in J. Dorn (ed.) Populism and the Future of the Fed. Washington, D.C.: Cato Institute (April 2022).
“Against Helicopter Money." Cato Journal, Volume 38, Number 1, Winter 2018, pp. 147-169.
“The Coming Fiat Money Cataclysm and the Case for Gold.” (K. Dowd, G. Kerr and M. Hutchinson). Cato Journal, Volume 32, Number 6, Spring/Summer 2012, pp. 363-388.
“The Coming Fiat Money Cataclysm.” (K. Dowd, G. Kerr and M. Hutchinson). Paper presented to the 29th Cato Institute Annual Monetary Conference Monetary Reform in the Wake of Crisis, Washington DC, November 16 2011.
“Easy Money and the Decapitalization of America.” Cato Policy Report, January/February 2011, Volume 33, Number 1, pp. 1, 6-8.
“U.S. Decapitalization, Easy Money and Asset Price Cycles.” (K.Dowd and M. Hutchinson), Cato Journal Volume 31, Number 3, pp. 505-519.
“Reawakening the Inflationary Monster: US Monetary Policy and the Federal Reserve." (K. Dowd and M. Hutchinson). Pp. 475-481 in R. Kolb (Ed.) Lessons from the Financial Crisis: Insights and Analysis from Today’s Leading Minds, Wiley. [Draft 24 July 2009]
Articles on Free Market Money
“The Emergence of Fiat Money: A Reconsideration.” Cato Journal, Vol. 20, No. 3, Winter 2001, pp. 467-476.
“The Invisible Hand and the Evolution of the Monetary System.” In J. Smithin (ed.) What is Money? London, Routledge, 1999, pp. 139-156.
“A Voluntaryist Path to a Free-Market Money.” The Voluntaryist, Vol. 63, August 1993, pp. 1, 2-7.
Articles on the Gold Standard
“The End of a Monetary Phenomenon.” Central Banking, Volume 22, No. 2, November 2011, pp. 41-48.
“Gold Standard”. Pp. 293-296 in B. Snowdon and H. R. Vane (eds) An Encyclopedia of Macroeconomics. Cheltenham: Edward Elgar, 2002.
“The Gibson Paradox and the Gold Standard: Evidence from the United Kingdom, 1821-1913.” (K. Dowd and B. Harrison) Applied Economics Letters, Vol. 7, July 2000, pp. 711-713.
“A Simple Model of the Gold Standard.” (D. Chappell and K. Dowd) Journal of Money, Credit, and Banking, Vol. 29, No. 1, February 1997, pp. 94-105.
“The Gold Standard, Gibson’s Paradox and the Gold Stock.” (K. Dowd and A. A. Sampson) Journal of Macroeconomics, Vol. 15, No. 4, Fall 1993, pp. 653-659.
“A New Model of the Gold Standard.” (K. Dowd and A. A. Sampson) Canadian Journal of Economics, Vol. 26 No. 2, May 1993, pp. 380-391.
“Financial Instability in a ‘Directly Convertible’ Gold Standard.” Southern Economic Journal, Vol. 57, January 1991, pp. 719-726.
Articles on Alternative Monetary Systems
“The Compensated Dollar Revisited.” Pp. 104-113 in K. Dowd, Money and the Market: Essays on Free Banking. London: Routledge, 2000.
“Using Futures Prices to Control Inflation: Reply to Garrison and White.” Journal of Money, Credit, and Banking, Vol. 32, No. 1, February 2000, pp. 142-145.
“An Almost Ideal Monetary Rule.” Greek Economic Review, Vol. 19, No. 2, Autumn 1999, pages 53-62.
“The Analytics of Bimetallism.” The Manchester School, Vol. 64, No. 3, September 1996, pp. 281-297.
“Some Unpleasant Budgetary Arithmetic of a Proposal to End Inflation: A Reply.” Economic Journal, Vol. 106, No. 436, May 1996, pp. 635-636.
“Deflating the Productivity Norm.” Journal of Macroeconomics, Vol. 17, No. 4, Fall 1995, pp. 717-732.
“A Rule to Stabilize the Price Level.” Cato Journal, Vol. 15, No. 1, Spring/Summer 1995, pp. 39-63.
“The Mechanics of Indirect Convertibility.” Journal of Money, Credit, and Banking, Vol. 27, No. 1, February 1995, pp. 67-88.
“A Proposal to End Inflation.” Economic Journal, Vol. 104, No. 425, July 1994, pp. 828-840.
“A Reply to Schnadt and Whittaker.” Southern Economic Journal, Vol. 60, No. 2, October 1993, pp. 501-504.
Articles on Monetary Reform
"Using Futures Prices to Control Inflation: Reply to Garrison and White.” Journal of Money, Credit, and Banking, Vol. 32, No. 1, February 2000, pp. 142-145.
“An Almost Ideal Monetary Rule.” Greek Economic Review, Vol. 19, No. 2, Autumn 1999, pages 53-62.
“Some Unpleasant Budgetary Arithmetic of a Proposal to End Inflation: A Reply.” Economic Journal, Vol. 106, No. 436, May 1996, pp. 635-636.
“Money and the Market: What Role for Government?” Cato Journal, Vol. 12, No. 3, Winter 1993, pp. 29-45. Translated into Russian and reprinted in Denyezhnaya Reforma v Postkommunisticheskikh Stranakh (Monetary Reform in Postcommunist Countries) edited by J. Dorn and R. M. Nureyev, Moscow: Catallaxy Press, 1996, pp. 79-103.
“A Rule to Stabilize the Price Level.” Cato Journal, Vol. 15, No. 1, Spring/Summer 1995, pp. 39-63.
“A Proposal to End Inflation.” Economic Journal, Vol. 104, No. 425, July 1994, pp. 828-840.
“Which Way for Euro-Money Reform?” Economic Affairs Vol. 11, No. 5, September 1991, pp. 29-31.
“Ending Australia’s Inflation: The Need for Radical Monetary Reform.” Policy, Spring 1990, pp. 15-17.
“How to End European Inflation: A Proposal to Deal with the Controversy Surrounding British Membership of the Exchange Rate Mechanism of the EMS.” Bruges Group Study Paper 4, December 1989.
Articles on inflation
“U.S. Core Inflation: a Wavelet Analysis.” (K. Dowd, J. Cotter and L. Loh) Macroeconomic Dynamics, Vol. 15, No. 4, pp. 513-536.
“Reawakening the Inflation Monster: US Monetary Policy and the Federal Reserve" (K. Dowd and M. Hutchinson). Chapter 59 in R. Kolb (Ed.), Lessons from the Financial Crisis: Insights and Analysis from Today’s Leading Minds, Wiley, 2010.
“Central Bank Independence and Inflation: An Alternative View.” Review of Policy Issues, Vol. 1, No. 3, Winter 1995, 41-45.
“The Damage Inflation Does.” Economic Review, Vol. 13, No. 2, November 1995, 32-35.
“The Costs of Inflation and Disinflation.” Cato Journal, Vol. 14, No. 2, Fall 1994, pp. 305-331.
“Ending Australia’s Inflation: The Need for Radical Monetary Reform.” Policy, Spring 1990, pp. 15-17.
Articles on Inflation Fan Charts
“The Swedish Inflation Fan Charts.” Journal of Risk Model Validation, Volume 2, Number 1, Spring 2008, pages 73-87.
“Backtesting the RPIX inflation Fan Charts.” Journal of Risk Model Validation, Volume 1, Number 3 (Fall 2007), pp. 1-19.
“Too Good to be True? The (In)Credibility of the UK Inflation Fan Charts.” Journal of Macroeconomics. Volume 29, Issue 1, March 2007, Pages 91-102.
“Forecasting inflation the inflation Fan Charts.” Chapter 7 in K. Matthews and P. Booth (eds) Issues in Monetary Policy: The Relationship Between Money and Financial Markets, pp. 80-93. Chichester: John Wiley and Sons, 2006.
“The Inflation Fan Charts: an Evaluation.” Greek Economic Review, Volume 23, No. 1 (Spring 2004), pp. 99-111.
Articles on European Central Banking
“The Misguided Drive Toward European Monetary Union.” Pp. 351-376 in K. Dowd and R. H. Timberlake, Jr. (eds) Money and the Nation State: The Financial Revolution, Government and the World Monetary System. Foreword by M. H. Miller, Jr. Published by Transaction Publishers (New Brunswick, NJ) under the auspices of the Independent Institute (Oakland, CA), 1998.
“An Imperfect Union: the Maastricht Treaty Could Not Deceive the Markets.” Barron's Volume 74, January 10 1994.
“European Monetary Reform: The Pitfalls of Central Planning.” Cato Institute Foreign Policy Briefing, No. 28, December 27, 1993, 12 pp.
“A Single Currency for Europe?” (K. Dowd and D. Greenaway) Greek Economic Review, Vol. 15, No. 1, Autumn 1993, pp. 227-244.
“Which Way for Euro-Money Reform?” Economic Affairs Vol. 11, No. 5, September 1991, pp. 29-31.
“Evaluating the Hard Ecu.” The World Economy, Vol. 14, No. 2, June 1991, pp. 215-225.
“A European Central Bank?” The Durell Journal of Money and Banking, Vol. 2, No. 3, February 1990, pp. 22-31.
“How to End European Inflation: A Proposal to Deal with the Controversy Surrounding British Membership of the Exchange Rate Mechanism of the EMS.” Bruges Group Study Paper 4, December 1989.
Other Articles on Monetary Economics
“U.S. Core Inflation: a Wavelet Analysis.” (K. Dowd, J. Cotter and L. Loh) Macroeconomic Dynamics, 15, 2011, pp. 513-536.
“FOMC Macroeconomic Forecasts: A Non-Parametric Analysis.” International Journal of Applied Economics. Volume 3, No. 2, September 2006, pp. 1-8.
“The Pagan Report on Modelling and Forecasting at the Bank of England” Greek Economic Review, forthcoming.
“Does Monetary Policy Have a Future?” (D. Cronin and K. Dowd) Cato Journal, Vol. 21, No. 2, Fall 2001, pp. 227-244.
“Monetary Policy in the 21st Century: An Impossible Task?” Cato Journal, Vol. 17, No. 3, Winter 1998, pp. 327-331.
“Is Convertibility on Demand Always Optimal?” (D. Chappell and K. Dowd) Pp. 167-174 in P. Topsacalian, Contemporary Developments in Finance, Paris: Editions Eska, 1997.
“Option Clause.” Pp. 501-2 in D. Glasner (ed.) Business Cycles and Depressions. An Encyclopedia. New York: Garland Publishers, 1997.
“Money and Banking: The American Experience.” Pp. 1-29 (Chapter 1) in George Edward Durell Foundation, Money and Banking: The American Experience. Fairfax, VA: George Mason University Press, 1995.
“The New Zealand Monetary Policy Experiment: A Preliminary Assessment.” (S. Baker and K. Dowd) The World Economy, Vol. 17, No. 4, November 1994, pp. 855-867.
“Reflections on the Future of Gold.” Review of Policy Issues, Vol. 1, No. 2, Summer 1994, pp. 45-55.
“Currency Competition, Network Externalities and Switching Costs: Towards an Alternative View of Optimal Currency Areas.” (K. Dowd and D. Greenaway) Economic Journal, Vol. 103, No. 420, September 1993, pp. 1180-1189.
“The Monetary Economics of Henry Meulen.” Journal of Money, Credit, and Banking, Vol. 24, May 1992, pp. 173-183.
“Stopping Inflation.” Pp. 13-22 in Honest Money. Perth, WA: Australian Institute for Public Policy, Policy Paper No. 21, 1992.
“The Value of Time Hypothesis and the Demand for Money: Some Evidence for the UK.” Applied Economics, Vol. 22, No. 5, 1990, pp. 599-603.
“The Value of Time and the Transactions Demand for Money.” Journal of Money, Credit, and Banking, Vol. 22, No. 1, February 1990, pp. 51-64.
“Two Arguments for the Restriction of International Capital Flows.” (K. A. Chrystal and K. Dowd) National Westminster Bank Quarterly Review, November 1986, pp. 8-19.