My research program is situated at the intersection of monetary and political economics. A theme that runs throughout my research is that economic policy outcomes are the result of interest group activity conditioned by the set of incentives and constraints generated by the political institutions within which this activity takes place. This approach has guided my research on monetary history, the constitutional political economy of alternative monetary regimes, and the organization of political institutions.
In the first chapter of my dissertation, I show that in order to establish the value of the monetary unit as a constitutional parameter in the socioeconomic game between policymakers and the public, a monetary rule must stipulate precisely which policy instruments the central bank can use to achieve macroeconomic stability. Absent such stipulations, the monetary authorities may opt for control procedures that limit the public’s ability to predict the future path of the money supply in order to pursue policies driven by interest group pressure. In the second chapter, I explore the feasibility of returning to a commodity money regime by estimating the amount of gold that would be necessary for the world’s largest economies to return to the gold standard. I find that the post-financial crisis level of banking reserves makes a return to the gold standard unlikely until central banks normalize their balance sheets. Finally, the third chapter, analyzes the function of the U.S. Department of Justice’s settlement authority, which I argue is used as a mechanism to indemnify interest groups whose legislatively-created benefits have been terminated due to legislative turnover.
My dissertation contributes to the ongoing discussion over the operation and desirability of monetary rules in two ways. First, my research shows that establishing the value of the monetary unit as a constitutional parameter will require a monetary constitution that denies policymakers discretion over monetary policy instruments. Second, my dissertation provides empirical evidence indicating that despite its merits, a return to the gold standard is unlikely in the near future. I also contribute to the analysis of the executive branch in the interest group theory of government by highlighting the role it plays in promoting the durability of special interest legislation.
My initial research on the Department of Justice’s settlement authority has been published in the Journal of Private Enterprise. I have also coauthored an article that is currently under review at Explorations in Economic Historyafter being revised and resubmitted entitled “Seigniorage in the Civil War South.” In this paper, we use the Confederacy’s attempts at monetary reform to determine whether their monetary policy was consistent with seigniorage maximization. Our findings indicate that the South could have benefited from increased rates of monetary expansion, and that it was the bifurcation of the Confederate Congress into two groups – those representing areas outside of Confederate control and those representing the rebel government’s interior – that led to the South’s reform efforts, which ultimately deprived the government of much-needed revenue.
My future research will build upon my existing scholarship on seigniorage and the political factors that influence it. One area that remains understudied in this field is whether governments maximize the revenue from seigniorage during civil wars and the effect that political divisions have on wartime monetary policy. I will also be focused on analyzing the politics of monetary policy, the governance structures of central banks, and how these factors influence policy outcomes. Finally, I will be exploring issues related to the control of the fiscal commons. Here, my research will examine what, if any, institutions emerge in democratic regimes to prevent fiscal resources from being fully dissipated.
As this brief essay illustrates, I employ a mixture of monetary and public choice theory in my research to explain contemporary and historical economic policy. My work has important policy-relevant implications for the political economy of reform and institutional design including the necessity of focusing on the rules-level of analysis when considering policy changes that have the potential to affect the lives of countless individuals.