Economist George Selgin on Money, Inflation, and the Federal Reserve
He explains that modern monetary policy operates through an interest rate floor system where the Fed sets the price of money rather than directly controlling quantity, and emphasizes that inflation is primarily driven bysummaryFederal Reserve Structure: The Fed is a government agency, not a private entity. While regional Fed banks are nominally owned by commercial banks, those owners have no influence over monetary policy decisions, which are takeawayModern Monetary Policy (Post-2008): Since October 2008, the Fed pays interest on reserves (IOR). This creates a 'floor' system where banks hold massive reserves rather than lending them out, making the traditional 'moneytakeaway














