Here is my quadrennial plea to put our monetary policy in the hands of a bot (and happy to call it a smart contract if that makes it more au courant).
Despite my best efforts, Bernanke, Yellen, and Powell all got the nod over the bot. But the risks of human policy error have never been higher (along with the balance sheet). Inflation may be more than “transitory”, amongst other distractions. New, more modern monetary theories are being mooted (CTRL-P), as well as additional mandates for the Fed (organizations always work better the more conflicting goals they have, right?). Given the complexity of the decision-making environment, all options need to be on the table, including the bot. And needless to say, the bot is not going to have an insider trading problem.
Here is the original press release:
Software Bot To Be Nominated Chairman of
Federal Reserve System
Cutting edge technology tapped to bring stability and
consistency to monetary policy
WASHINGTON D.C. – August 25, 2009 — President Barack Obama today announced he intends to nominate Monet 3.0, a software bot, to become Chairman and a member of the Board of Governors of the Federal Reserve System. As Chairman, Monet will be charged with conducting the nation’s monetary policy by influencing money and credit conditions in the economy.
“Software bots today are successfully outperforming the world’s best human practitioners in complex endeavors like chess, and they do so without irrationality or exuberance,” said President Obama. “Despite the bot’s French-sounding name, I am confident that Monet 3.0’s discipline and transparency will bring price stability and foster the economic growth required for a full economic recovery.”
Monet was born in a lab at Stanford University in the early 1990s and is currently in version 3.0. The software instantiates a modified version of the Taylor Rule. Source code for Monet is available for broad inspection and reuse under the modified BSD license at http://bot.federalreserve.gov.
Monet’s nomination requires approval by the Senate and a bout of hyperinflation that makes the Hungarian episode of 1946 look modest.