James L Caton

Purpose

The purpose of this paper is to integrate a detailed theory of perception and action with a theory of entrepreneurship. It considers how new knowledge is developed by entrepreneurs and how the level of creativity is regulated by a competitive system. It also shows how new knowledge may create value for the innovator as well as for other entrepreneurs in the system.

Design/methodology/approach

The theory builds on existing literature on creativity and entrepreneurship. It considers how transformation of mental technologies occurs at the individual and system levels, and how this transformation influences value creation.

Findings

Under a competitive system, the level of creativity is regulated by the need for new ways of doing things. Periods of crisis wherein old means of coordination begin to fail often precipitate an increase in creativity, whereas a lack of crisis often allows the system to settle to a stable equilibrium with lower levels of creativity.

Research limitations/implications

The combination of methodology and methods facilitates a description of discrete building blocks that guide perception and enable creativity. This framing enables consideration of how a changing set of knowledge interacts with a system of prices.

Practical implications

Policy makers must take care not to encumber markets with costs that unnecessarily constrain creativity, as experimentation makes the economic system robust to shocks.

Social implications

This work provides a framing of cognition that allows for a linking of agent understanding that permits explicit description of coordination between agents. It relates perception and ends of the individual to constraints enforced by the social system.

Originality/value

As far as the author is concerned, no other work ties together a robust framing of cognition with computational simulation of market processes. This research deepens understanding in multiple fields, most prominently for agent-based modeling and entrepreneurship.

Our agent-based model examines the ramifications of formal defense agreements between countries. Our model builds on previous work and creates an empirically based version of a tribute model in which actors within existing real-world networks demand tribute from one another. If the threatened actor does not pay the tribute, the aggressing actor will engage in a decision to start a war. Tribute and war payments are based on a measure of the country's wealth. We utilize the Correlates of War dataset to provide us with worldwide historical defense alliance information. Using these networks as our initial conditions, we run the model forward from four prominent historical years and simulate the interactions that take place as well as the changes in overall wealth. Agents in the model employ a cost benefit analysis in their decision of whether or not to go to war. This model provides results that are in qualitative agreement with historical emergent macro outcomes seen over time.

Since Coase’s paper on the firm, transaction costs have occupied much attention as a field of economic inquiry. Yet, with few exceptions, neoclassical theory has failed to integrate transaction costs into its core. The dominant mode of theorizing depends upon Brouwer fixed points which cannot integrate transaction costs in more than a superficial manner. Agent-based modeling presents an opportunity for researchers to investigate the nature of transaction costs and integrate them into the core of economic theory. To the extent that transaction costs reduce economic efficiency, they provide opportunities for entrepreneurs to earn a profit by reducing these costs. We employ an extension of Epstein and Axtell’s (1996) Sugarscape to demonstrate this point one type of transaction costs: search costs. When agents do not face the cost of finding a trading partner, the system quickly reaches a steady state with tightly prices regardless of agent production strategies. When search costs are present, entrepreneurs may use competing strategies for production and exchange that allow them to earn higher revenues than they would earn otherwise. These cost reducing innovations tend to promote concatenate coordination (Klein 2012). The agent’s production strategies represent technology in the form of mental models (Denzau and North 1994) that shape agent action with regard to the agent’s environment. The success of these are dependent on their ability to overcome search costs. The average profit, market rate of return, earned by each of these mental structures tends to equalize as a result of competition.

James Buchanan recognized that governing arrangements were certified by a constitutional moment. He also recognized that there existed a continual bargaining over these arrangements. There exists not a single constitutional moment, but an endless series of constitutional moments by which the social contract evolves. This work outlines a framework for interpreting the formation and transformation of the social contract and uses this framework to identify changes in the social fabric that enabled the development of pluralism in pre- and post-Reformation England. Proper framing of this transformation requires consideration of interaction between ideas and institutions across political, economic, legal, and religious spheres. Ideological diversity had enabled the English Reformation, an institutional shift that ultimately diminished the efficacy of cooperation between church and state. The development of a particularly liberal, English worldview reflecting growing autonomy for individuals and communities is evidenced by the growing use of language related to concepts of virtue, commerce, and liberty.

The objective of this research is to determine the factors that influence the outcomes of previous scientific research on the potential adverse effects of glyphosate-based herbicides (GBH) on human and animal health and the environment. The emphasis is placed on answering the questions about the causal linkages between who funds and performs the research and the research outcomes. A lack of change in use of the GBHs in agriculture stems directly from public (Government) support of the position how the GBHs are safe for humans and the environment. The results of our meta-analysis clearly demonstrate how large and growing majority of influential research on the subject suggests otherwise. Early research on the subject, prior to 2010, done by private and public sector researchers was strongly indicating how GBHs are safe for humans, animals and the environment. It is possible that there is inertia in food safety policy leading to this large gap and disconnect between the results of hundreds of more recent studies and the (current) course of public policy. This study helps us better understand why science on this subject has not been conclusive and thus not the main driver of “science-based” policies about the GBH based production of genetically modified foods. The importance and the implications of this research are obvious: Evidence-based decisions and policies informed by rigorous research and unimpeded by other interested parties are necessary when it comes to developing public policy that affects food safety and in turn human and animal health, and the environment.

Society is naturally entangled. It always has been. In the pre-modern era, the lines between economic, political, and religious activities were typically blurred. In the modern era, these domains interact, but stark divisions between them require greater analytical sophistication, both for agents living in an entangled world and for theorists who seek to analyze it. This work lays the groundwork for microfoundations of a theory of entanglement. The existence of an institution implies the adoption of a shared mental model used by agents participating in the institution to frame activity within it. If there exist entangled institutions, so too must minds of participants in such an institutional nexus be entangled. Thus, entangled theory requires a theory of agency that integrates cognition across various domains of activity as well as various levels of analysis and participation.

Although the V-form organization has received attention in light of the integration of blockchain with processes in supply chains, analysis of a V-form organization as a firm in terms of its identity as legal entity has not been considered. Building on the concept of internalization, I reflect upon the efficiency increases the V-form firm can offer to supply chain members. V-form firms can support robust, decentralized markets that use cryptocurrency native to the blockchain with which the supply chain is integrated. Likewise, the V-form firm can provide property within the firm and which the firm is incentivized to protect from predatory intervention. I follow by considering the impact of the V-form firm on institutions adjacent the supply chain. The V-form firm stands to increase the level of competition in the realms of governance and monetary systems, either directly providing alternatives or indirectly influencing existing systems for which it may serve as substitute.

This work aligns James Buchanan’s theory of social contract with the structure of Michael Moehler’s multilevel social contract. Most importantly, this work develops Buchanan’s notions of moral community and moral order. It identifies moral community as the vehicle of escape from moral anarchy, where community is established upon a system of rules akin to James Buchanan’s first-stage social contract. Moral order establishes the baseline treatment of non-members by members of a moral community and also provides a minimum standard for resolving disputes that are not resolved by the more robust social contract shared among community members. This work links the multilevel contract to polycentric social order, noting that polycentric systems may promote development of the moral order by enabling experimentation with and emulation of rules and rule systems made available by overlapping and adjacent institutions.

Having pioneered the concept in economics that institutions structure incentives, Douglass North’s later work posed the question, in turn: what structures institutions? His approach explored the role of culture, norms, and ideas and eventually drew its focus on shared mental models as the basis of institutions. An ongoing literature takes up North’s fundamental question. In this paper, we contribute to this literature by bringing together North’s mental-models approach and the work of philosopher John Searle. Searle pioneered the concept in philosophy that institutions are constitutive rules, established through collective assignment of particular status to objects in the world. Drawing upon cognitive science research on knowledge, learning, and habituation, as well as computer science research on artificial intelligence, we develop Searle’s framework to pose a simple yet general account of the cognitive origins of institutions and the implications of this link for social theory. Our framework reconciles the social science approach to institutions as regulative rules with the philosophy approach to institutions as constitutive rules. It also provides a basis for considering impediments to social interaction that arise when individuals possess conflicting normative ideas and affiliate into groups whose shared understandings appear to conflict.

When directives rather than contracts determine rights to water flows, agents will substitute away from securing water rights by contract toward securing them through political directives. When those directives are legitimated by court rulings, they alter the rules that govern social interaction. While farmers are able to secure water under different institutional arrangements, alterations in those arrangements through legislation and regulation can induce changes in organizational and allocative patterns of resource usage. In particular, we explore evolution in agricultural organization in California in response to legislative and regulatory changes in traditional water law. Institutional transformation expanded the membership for the arena of water governance in California, allowing parties who do not locally interact with or depend upon water and its allocation in California. To this end, we analyze the relationship between Big Players in the California Water Game and the reorientation of a water rights regime in light of legal precedent and actions from existing regulatory bodies.

Shared understanding of agents within a group provide the foundations for institutionally guided interaction. Institutions are coordination devices, which include norms, rules, and strategies, as well as formal institutions that explicitly denote a hierarchy of offices, each subject to particular rights and obligations (Ostrom 1986; 1990; Searle 2005). Institutions are comprised of a network of actors with shared beliefs and compatible beliefs. Actors use a given institution or set of institutions to coordinate their actions. Members of a formal religious group abide by certain rules and practices. Citizens of a nation must abide by its laws. Visitors to another nation must be careful to conform their actions to local custom or else risk offending their new friends and acquaintances. They can also transform institutions, especially if an institution is failing to achieve results that are pleasing to a significant number of those subject to it. Finally, knowledge is generated and acted upon in environments where resources are scarce. Knowledge that is to survive must enable actors to achieve desired ends at relatively low cost. If a set of knowledge does not help an agent or group of agents survive in a given environment, agents employing that set of knowledge will, on average, not survive. Ideas, like organisms, must adapt to the environment or else face lower rates of survival or extinction.

At the heart of the Austrian critique of government intervention is an appreciation for the local knowledge that intervention tends to impair or destroy. Within Austrian analysis and literature on social capital more generally, terms like rules, norms, and laws are used to described institutions that contain this knowledge. Institutions are themselves interdependent, taking on unique structure at local levels as agents must simultaneously fulfill rights and obligations of a multitude of institutions.Thus, interventionin economic relations can affectother social relations and vice versa.In what follows, we argue that the language-game, a theoretical construct advanced by Ludwig Witgenstein (1953), can serve to improve our understanding ofthe knowledge role of institutions and provides good fit in describing the problems that arise in the course of entrepreneurship as well as government intervention

I consider two regimes in which descriptions of policy as being easy or tight were incomplete: Adolph Miller’s Fed, guided by the Real Bills Doctrine to hold speculative activity suspect, and Ben Bernanke’s Fed, guided by a belief that large financial institutions should be kept from failing in order to maintain macroeconomic stability. For both of these cases, I argue that the interpretation of monetary policy must include not only changes in policy variables, but the ideologies of those who shaped policy. Ideology informs the aims of policymakers and their interpretation of data. We can judge the motivations for, and the structure of, policymaker strategy and also better understand the long-term effects of these different regimes on the structure of U.S. monetary policy by considering the interaction between the ideology and theory that guides the policymaker.

We leverage a transaction costs narrative to provide a theoretically unified presentation of the evolution of exchange, with the latest evolutionary frontier being cryptocurrency and decentralized finance. We show that with each new development in the evolution of money, the new form or medium of exchange must reduce transaction costs relative to relevant alternatives. The development of blockchain and cryptocurrency reduced the cost of transferring currency by removing the need for a trusted third party to intermediate funds while also providing the benefit of anonymity/pseudonymity. Likewise, decentralized finance does not require a third party to intermediate savings and investment and can provide contingent anonymity to borrowers. While these innovations have attracted investment in the economically developed world, they appear to have significantly reduced transaction costs for transactors who might otherwise be defrauded of funds by corrupt governments who may extort third parties responsible for intermediating funds.

Despite the past decade’s rapid innovation in adapting blockchain technology to new uses, financial intermediation remains elusive except in basic and highly collateralized forms. We introduce the concept of the technical frontier to delimit the kinds of interactions that can feasibly be structured algorithmically among pseudonymous agents, as on a blockchain, and show that lending and financial intermediation – unlike monetary exchange – lie outside it, even in simple forms. The path forward for truly blockchain-native financial applications, therefore, must involve the integration of real-world identity information in order to disincentivize defection. We discuss several potential technologies for doing so, and conclude that such integration is possible without compromising pseudonymity, provided real-world identity is available in the breach.

Early in his career, Hayek viewed attempts to stabilize exchange rates by facilitating cooperation between central banks, with respect to their demand for gold, to be at odds with the fundamental mechanisms of the gold standard. He opposed proposals by Irving Fisher, Gustav Cassel, and Ralph Hawtrey that promoted stabilization of demand for gold and price levels as a next best option. Hayek viewed the nations that refused to devalue their currency after monetary expansion during wartime as complicit in degrading the international gold standard. In 1935 Hayek's emphasis began to change, his position sounding much like the arguments of Cassel and Hawtrey. Though he eventually gave up hope that the international gold standard would be reestablished, his later work on money provides theoretical underpinnings for systems that would promote the same sort of stability and predictability that the classical gold standard had provided.

Purpose

The development of blockchain and cryptocurrency may alleviate the economic strain associated with recession. Economic recessions tend to be aggregate-demand driven, meaning that they are caused by fluctuations in the supply of or demand for money. Holding monetary policy as solution assumes that stability must arise from outside of the economic system. Under a policy regime that allows innovations in blockchain to develop, blockchain technology may promote a money supply that is responsive to changes in demand to hold money. The purpose of this paper is to suggest that cryptocurrencies present an opportunity to profitably implement rules that promote macroeconomic stability. In particular, cryptocurrency that is asset-backed may provide a means for cheaply attaining liquidity during a crisis.

Design/methodology/approach

The role of cryptocurrency in promoting macroeconomic equilibrium is approached through the lens of monetary theory. Moves away from macroeconomic equilibrium necessitate either a change in the average price of money or a change in the quantity of money, or a change in portfolio demand for money. Cryptocurrency promotes an increase, however this requires the alignment of policy regulating the use of cryptocurrency, reduction in taxes placed on the use of cryptocurrency and cryptocurrency protocol.

Findings

Cryptocurrency is unlikely to become legal tender, but it may alleviate macroeconomic fluctuations as a near money that provides liquidity and whose supply is sensitive to changes in demand to hold money and money-like substitutes. This role might be inhibited if policy stifles the development of cryptocurrencies and blockchain technology.

Research limitations/implications

New financial innovations like cryptocurrencies can be analyzed applying the equation of exchange in light of the mechanics of money creation under conditions of disequilibrium. Monetary disequilibrium may be promoted by policy that causes bottlenecks in financial markets.

Originality/value

Theory of monetary disequilibrium has broad implications for the development and regulation of financial markets. This theory has not been applied to the development of cryptocurrency markets.

Money is charcteristically considered a medium of exchange, store of value, unit of account, and standard of deferred payment. This is true for money throughout the history of the United States, as in any other historical setting. In colonial America, many goods fulfilled these roles. Scarcity of money led colonists to develop their own moneys. Early commodity moneys included beaver fur, wampum, fish, and corn that emerged during economic intercourse with local tribes (Davies & Hodge Bank 2002, 460). This was part of a larger trend in an era where rural colonists used cash crops as medium of exchange. Tobacco tended to be the most dominatnt of non-metallic commodity moneys in many areas, including Virginia where tobacco notes sirculated (Rothbard 2002, 48). Colonists also employed gold and silver for trade, most often for the purchase of British commodities (Davies & Julian Hodge Bank 2002, 458; Ferguson 1961, 4) often in the form of foreign currencies. These included "the French guinea, the Portugues 'joe,' the Spanish doubloon" among others (Rothbard 2002, 48-49). A persistent need for currency led to the development of paper moneys not dependent on existing commodities. These included bills of credit issued by land banks. The bills depended on the borrower's land for collateral (Davies & Julian Hodge Bank 2002, 5) In other cases, state-issued bills of credit were printed and were promised to be redeemable in coins. Bills of exchange functioned like checks. In the case of trade, sellers allowed merchants to defer payment for goods, allowing time for the sale of these goods (Michener 2011).

Traditional Austrian cycle theory starts from general equilibrium and explains how an expansion of bank credit unmatched by an expansion of saving can create a cycle of boom-and-bust, and with the bust followed by restoration of normality. In contrast, this paper offers a non-equilibrium reformulation of those earlier Austrian insights, which expands and refocuses the analytical agenda of macro theory. Our key analytical feature is the conceptualization of a macro economy as constituted through an open-ended ecology of plans. Within this framework, macro variables are not primitives but are derivative from micro-level interaction. In turn, the computation of optimizing actions is beset with undecidability. The theory of entrepreneurial choice that is suitable for this analytical framework is based on rule-following or algorithmic choice and not on computational maximization. What results is a macro ecology, the internal operation of which entails natural volatility. What are called policy actions, moreover, operate inside and not outside the ecology, and can create induce volatility within the ecology.

In order for emergence to actually have significance for a specifically human social ontology requires a commitment on the part of participants that they submit to a status function implied or enabled by emergent phenomena such that participants could, if required, explicitly recognize the meaning of the status attribution in terms the deontic powers that it generates. In so doing, individuals recognize themselves and others as members of a community submitted to the meaning of the status function. Defined in this way, we can identify Tony Lawson's notion of emergence in Searlean terms. Emergence entails the generation of states and processes in a system that when recognized by actors, endows them with rights, duties, and obligations. In the case of Mengerian evolution of money, a status function is adopted once members within a given exchange network recognize that a particular commodity or other good has become generally accepted among network participants. This occurs by practice of exchange between members. We show how Searle has provides precedent for this interpretation of status functions through his elaboration of speech acts and declarations.

The Monetary Foundations of the Macroeconomy. Ed., Rustici, Caton, Shamoun, and Shamoun. San Diego, CA: Cognella Academic Publishing, 2015.

Macroeconomics: Past and Present. Ed., Rustici, Caton, Shamoun, and Shamoun. San Diego, CA: Cognella Academic Publishing, 2015.

The Economics of Blockchain and Cryptocurrency. Ed., Caton, James. Edward Elgar Publishing, 2022.

It is not uncommon, nor is it unfounded, for academics who are themselves non-economists, or for economists who operate outside of the mainstream of the discipline, to accuse economists of engaging in academic imperialism. This charge has commonly been leveled against cliometricians whose statistical analyses sometimes ignore broad consideration of historical context (North 1997). In his book, The Social Life of Money, Nigel Dodd casts a much broader net in his critique of economists. For Dodd, economic theory, not just its technical manifestations, misrepresents the role of money in society. Throughout the book, Dodd presents his skepticism toward price theory. He discounts the traditional framing of money as a medium of exchange, store of value, unit of account, and standard of deferred payment that price theory implies and argues that money “is not an objective entity whose value is independent of social and political relations . . . money is a process” (p. 386, emphasis in the original). He questions the traditional view that holds money as a class of objects with particular characteristics suited for its economic role. Dodd dismisses the view that imagines “money is a thing with a stable meaning” whose “functions are constant” (p. 393, emphasis in the original). To defend this claim, Dodd takes the reader on a tour through the history of sociological and economic thought. The tour is divided into eight categories: Origins, Capital, Debt, Guilt, Waste, Territory, Culture, and Utopia. The topics contained within each category are too numerous for explication here. Instead, I will focus on some of Dodd’s core claims: that politics and economics are inseparable and that price theory does not hold analytical primacy in interpreting the role of money — a claim best represented by his unacceptance of Carl Menger’s theory of money emergence.

For a topic that has been as thoroughly researched as the Great Depression, it is difficult to imagine a book that makes as significant of a contribution to our understanding as Scott Sumner’s, The Midas Paradox: Financial Markets, Government Policy Shocks, and the Great Depression. Sumner’s contribution relies on a thorough investigation of investor expectations. While he pays heed to “rational expectations,” he provides context and, within that context, varying interpretations of changes in policies and circumstances. What Sumner lacks in terms of comprehensive meta-theoretical structure he makes up for with a thoughtful framing of a plethora of quantitative and qualitative data. In doing so he identifies a number of plausible arguments for the data presented and casts his vote for what seems to him to be the best supported hypothesis.

Though he identifies a number of contributing factors, Sumner indicts persistent shocks in the gold and labor markets as being primarily responsible for initiating and perpetuating the Great Depression. These shocks were the result of the implementation of a long series of policies that altered the financial and political environment. The threat of these policies increased uncertainty faced by investors in regard to the price of gold and wages. The policies adopted were quickly integrated into prices of financial assets as “stock prices responded positively to news of policy initiatives that were expected to boost output, and vice versa” (37). As disruptive interventions and policy uncertainty adversely impacted the profitability of business, the ability of businesses to profit from wise decisions was degraded. Political battles waged by special interests and the Roosevelt administration ensured that the United States would not escape from the Great Depression.

To communicate the significance of two intellectual giants who were largely opposed to one another is no simple feat. It is precisely this task that is taken up by Thomas Hoerber. Hoerber is not an economist by training. He earned his Ph.D. in European studies. The author states from the outset that “the purpose of the following analysis is to get an idea of the current relevance of their two major studies as economic theories” (p. 7). The search for relevance to modern policy conversations takes precedent in the study. This is apparent in a rather thin characterization of Hayek’s intellectual perspective as well as a thin defense of the author’s normative assumptions that appear throughout the book. Hoerber’s conception of arguments from Hayek and Keynes divide between economic anarchy, that is markets unrestrained without regulation of any kind, and state interventions aimed at making the market operate more efficiently and equitably.

Hoerber believes that Hayekian thought is the bedrock of neo-liberalism. His understanding of Hayek is as hazy as his definition of neo-liberalism, the latter of which seems to be whatever marriage of political and economic systems that pervade modern society at the moment. Such a modern perspective is aided by the apocryphal story of Margaret Thatcher slamming down Hayek’s Constitution of Liberty, saying, “This is what we believe.”

Rarely does one read a book on a topic already researched thoroughly and still feel as if one has walked away with a new perspective. More often, authors rehash old arguments, perhaps with a revelation or two that the reader finally earns after a laborious trudge through hundreds of pages whose arguments feign novelty. Sebastian Edwards’s new publication, American Default: The Untold Story of FDR, the Supreme Court, and the Battle over Gold, is not the latter kind of book. This review recapitulates the essence of Edwards’s story and highlights his unique contribution.

Edwards opens with an observation: the exit from the gold standard and the abrogation of gold clauses in contracts are practically a forgotten episode, and to the extent it is remembered, recollection of it “has been simplified and sanitized” (p. xvii). My own understanding of it did not successfully avoid this critique. Franklin Roosevelt and Congress successfully challenged gold clauses, which were contractual agreements to pay in terms of gold parity, making them nonbinding as the Supreme Court idly sat by. Right? This is not at all the story told by Edwards. The Supreme Court’s de facto approval of the abrogation of the gold contracts by the Roosevelt administration appears to have been a retreat as the Supreme Court prepared for “an open war” with the administration (p. 191). Edwards shows that there was no shortage of intrigue in the development of the policies that led to this event, whether inside or outside the administration.

The history of ideas is a tempting domain for exploration. Building from the ground up, one might feel that he or she truly understands the modern intellectual and political environment by looking back to the greats from the Western intellectual tradition. How did Aristotle conceive of money? What did Adam Smith proport as the policy regime that would best govern the monetary system? What political battles were these authors fighting at the time? What later opposition did these ideas encounter and why? Such questions might shed light upon a subject, or it might be used only to reify one’s own views.

In The Currency of Politics: The Political Theory of Money, Stefan Eich explores political thought on money. Starting with Aristotle, the author identifies money within the nexus of communal norms, including norms of justice. Exchange mediated by money was, for Aristotle, reciprocal in nature. Eich closes his discussion of Aristotle with a preview of the book’s theme: "Unsurprisingly, monetary and fiscal history are no less subjects of fierce contention. In their path-breaking work, (1963) A Monetary History of the United States, 1867–1960 (Princeton, N.J.: Princeton University Press), Milton Friedman and Anna Schwartz proposed that macroeconomic fluctuations across this period could be explained by fluctuations in the quantity of money. The authors famously blame the worst economic downturn in American history on the contractionary policy of the Federal Reserve. With good monetary policy, the worst economic downturns simply won’t materialize."

Since the Great Depression, macroeconomic theory has been a domain subject to intense controversy. The prime point of contention concerns the extent to which financial markets tend to be self-correcting. If they are, the worst economic fluctuations are likely due to interventions that are unpredictable, poorly formulated, or poorly implemented. If not, then macroeconomic instability is an inherent aspect of financial markets that should be actively corrected and prevented by a combination of regulation, fiscal policy, and monetary policy.

Unsurprisingly, monetary and fiscal history are no less subjects of fierce contention. In their path-breaking work, (1963) A Monetary History of the United States, 1867–1960 (Princeton, N.J.: Princeton University Press), Milton Friedman and Anna Schwartz proposed that macroeconomic fluctuations across this period could be explained by fluctuations in the quantity of money. The authors famously blame the worst economic downturn in American history on the contractionary policy of the Federal Reserve. With good monetary policy, the worst economic downturns simply won’t materialize.