William J. Luther, Ph.D., is an associate professor of economics at Florida Atlantic University, director of the American Institute for Economic Research’s Sound Money Project, and an adjunct scholar with the Cato Institute’s Center for Monetary and Financial Alternatives. The Social Science Research Network currently ranks him in the top five percent of business authors. Luther has published articles in leading scholarly journals, including Journal of Economic Behavior & Organization, Economic Inquiry, Public Choice, Journal of Institutional Economics, Quarterly Review of Economics and Finance, and Contemporary Economic Policy. His work has been featured by major media outlets, including NPR, The Wall Street Journal, TIME Magazine, U.S. News & World Report, Fortune, National Review, The Guardian, POLITICO, and VICE News.
He earned his M.A. and Ph.D. in economics at George Mason University.
Areas of Expertise (7)
George Mason University: Ph.D., Economics 2012
George Mason University: M.A., Economics 2011
Capital University: B.A., Economics 2008
Selected Media Appearances (16)
There’s a hidden recession red flag hidden in the latest jobs report, according to two top economists
“This jobs report harbored the first indicator that the U.S. will slow down a lot, and by our forecast enter a recession, in the second half of 2023,” says Eugenio Aleman, chief economist for brokerage Raymond James. Adds Will Luther, an economics professor at Florida Atlantic University, “When the jobs numbers are suddenly pointing towards weakness and rapidly falling inflation, the Fed’s plans to keep over-tightening puts the economy on dangerous ground.”
How has Florida fared economically under DeSantis’ watch?
Tampa Bay Times online
“Overall, I would say that Gov. DeSantis has been a good steward,” said William J. Luther, a Florida Atlantic University economist. “He inherited a well-performing state and has generally ensured that the state continues to work well for its residents.”
Debt ceiling war raises angst among Floridians
Sun Sentinel online
“Florida will not be immune to those consequences,” said William Luther, an economist and associate professor at Florida Atlantic University in Boca Raton.
Interest rates raised again
WPBF 25 News spoke with Will Luther, Associate Professor of Economics at Florida Atlantic University, about what the interest rates mean for Floridians.
How Silicon Valley Bank bailout will be a financial burden for US bank customers
New York Post online
But the fund gets its money in quarterly payments from FDIC-insured banks, which will likely make customers shoulder the burden of any added costs, said William Luther, director of the American Institute for Economic Research’s Sound Money Project.
Fed Raising Interest Rates Higher Than First Thought, Jerome Powell Tells Senate Committee
The Epoch Times online
William Luther, the director of the American Institute for Economic Research's (AIER) Sound Money Project, was surprised by Democrats maintaining "a broken narrative on inflation." Senate Banking Committee Chair Sherrod Brown (D-Ohio) and some of his colleagues referenced Russia's invasion of Ukraine, the avian flu outbreak, corporate greed, and the supply chain crisis as reasons for rampant price inflation.
As new data shows inflation rose in January, here's what consumers can expect next
"Inflation is going to come down gradually, if the Fed conducts policy the way it says it intends to," said William Luther, director of the American Institute for Economic Research's Sound Money Project.
The Federal Reserve Risks Setting an Inflation-Expectations Trap
National Review online
September marked the fifth consecutive month of inflation at or above 4 percent. The Personal Consumption Expenditures Chain-type Price Index (PCEPI), the Fed’s preferred measure of the price level, grew 4.4 percent from September 2020 to September 2021. PCEPI inflation has averaged 2.98 percent on an annual basis since January 2020, just prior to the pandemic.
El Salvador Runs a Bitcoin Scam
The Wall Street Journal online
Ever since Iran was denied access in 2012 to the Society for Worldwide Interbank Financial Telecommunication, a Brussels-based global banking network known as Swift, the axis of evil and its allies have intensified their search for a way to move illicit money electronically, outside the legal banking system.
Covid Benefits, UBI and Employment
The Wall Street Journal online
Generous federal benefits have prevented employment from recovering faster (“A Guaranteed Income At Work,” Review & Outlook, Aug. 11). But one should think twice before interpreting this as evidence against a universal basic income. UBI schemes pay people regardless of whether they work. Some of the Covid benefits, in contrast, are available only to those who are not working. Surely some of them would return to work if doing so didn’t require giving up the benefits.
Closing the Gold Window — Fifty Years On
National Review online
Fifty years ago, President Richard Nixon closed the gold window, thereby preventing foreign governments from converting U.S. dollars into gold. This action was initially billed as a temporary measure. “I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold or other reserve assets,” Nixon told a television audience.
Biden Is Failing Cuba’s Uprising
The Wall Street Journal online
It’s been five weeks since thousands across Cuba joined unprecedented protests against the 62-year-old communist regime. Yet Team Biden is still having trouble delineating a policy that actively supports the popular cry for self-governance. It’s enough to make one wonder if regime change is an administration priority.
Lessons for Today From the Gold Standard
The Wall Street Journal online
President Richard Nixon ended the redeemability of dollars for gold and ushered in the fiat money era on Aug. 15, 1971. Many economists look back on the occasion with delight, agreeing with John Maynard Keynes that the gold standard was “a barbarous relic.” Today nearly all economists believe the U.S. economy has performed better under fiat money than it would have with the gold standard.
What to Do if There Isn’t COVID-19 Student Loan Forgiveness
William J. Luther, director of the Sound Money Project at the nonpartisan nonprofit American Institute for Economic Research in Massachusetts, has previously called forgiveness bad policy. Even in light of recent events, he says “a student loan debt forgiveness policy does not target those who need it most.”
Florida throws open its doors — and holds its breath
According to new research from Florida Atlantic University economics professor William Luther, DeSantis can only take so much credit for Florida’s relatively good condition. Using Google Mobility, Luther found that local governments, business owners and citizens began social distancing before the DeSantis issued orders March and April. Roughly three-quarters of the change in residential, retail, recreation, workplace and public transportation activity preceded orders by states to shelter in place.
Venezuela Puts the Crypt in Cryptocurrency
The Wall Street Journal online
Venezuelan dictator Nicolás Maduro is again unleashing armies of inspectors across the country to enforce price controls as a means of controlling hyperinflation, the Venezuelan newspaper Tal Cual reported last week.
Selected Articles (11)
Cash, crime, and cryptocurrenciesThe Quarterly Review of Economics and Finance
2021 In The Curse of Cash, Kenneth Rogoff lists reductions in criminal activity and tax evasion among the primary benefits of eliminating cash. We maintain that, to the extent that individuals are interested in purchasing illicit goods and services or evading taxes, eliminating cash will encourage them to switch to close substitutes. Hence, governments intent on realizing the benefits cited by Rogoff would not merely need to eliminate cash. They would also need to ban alternatives. This is especially relevant given the proliferation of cryptocurrencies, which provide a fair degree of anonymity for users.
The Federal Reserve's response to the COVID-19 contraction: An initial appraisalSouthern Economic Journal
2021 We provide an initial assessment of the Federal Reserve's policy response to the COVID-19 contraction. We briefly review the historical episode and consider the standard textbook treatment of a pandemic on the macroeconomy. We summarize and then evaluate the Fed's monetary and emergency lending policies through the end of 2020. We credit the Fed with promoting monetary stability while maintaining that it could have done more. We argue that the Fed could have achieved stability without employing its emergency lending facilities. Although some facilities likely helped to promote general liquidity, others were primarily intended to allocate credit, which blurs the line between monetary and fiscal policy. These credit allocation facilities were unwarranted and unwise.
Central bank independence and the Federal Reserve's new operating regimeThe Quarterly Review of Economics and Finance
2020 The Federal Reserve is exposed to a greater degree of political influence under its new operating regime. We survey the relevant literature and describe the Fed's new operating regime. Then we explain how the regime change reduced de facto central bank independence. In brief, the regime change increased the appointment power of the President and improved the bargaining power of Congress. We offer some suggestions for bolstering de facto independence at the Fed.
Is Bitcoin a Decentralized Payment Mechanism?Journal of Institutional Economics
2020 We make a distinction between centralized, decentralized, and distributed payment mechanisms. A centralized payment mechanism processes a transaction using a trusted third party. A decentralized payment mechanism processes a transaction between the parties to the transaction.
Is bitcoin money? And what that meansThe Quarterly Review of Economics and Finance
2019 In a recent article, Yermack (2015) argues that bitcoin is not money because it functions poorly as a medium of exchange, unit of account, and store of value. We offer a more conventional view. We maintain that the standard approach classifies an item as money if and only if it functions as a commonly-accepted medium of exchange.
Adaptation and central bankingPublic Choice
2019 What or who governs central bank decisions? Most considerations focus on motivations. Instead, we consider the extent to which specific behaviors have adaptive value in the context of central banking. From that perspective, poor decisions are not the product of poor motivations.
Getting off the ground: the case of bitcoinJournal of Institutional Economics
2018 By declaring an item legal tender or making it publicly receivable, governments might generate sufficient demand to determine the medium of exchange. How do private actors launch a new money? There are two views in the literature. The first requires offering an item with a use value to some agents that is distinct from its role as a medium of exchange. The second suggests that agents might coordinate on an intrinsically useless item. With these views in mind, I survey the logs from the original bitcoin forum, bitcoin-list. I find that early participants in the bitcoin community understood the importance of coordination and took steps to coordinate users.
Bitcoin and the bailoutThe Quarterly Review of Economics and Finance
2017 On March 16, 2013, Cyprus announced that it would accept a bailout that required imposing a one-time levy on bank deposits. It has been argued that, by making traditional deposit accounts seem less secure, the bailout announcement prompted some to consider—or reconsider—using the cryptocurrency bitcoin. Relying on rank data for a subset of apps, existing studies maintain that interest in bitcoin increased following the announcement, especially in countries with troubled banks. We argue that (1) focusing on a subset of apps does not allow one to distinguish a general increase in the demand for bitcoin apps from a substitution between bitcoin apps and (2) changes in rank data are a poor predictor of changes in the number of downloads. In order to address these concerns, we collect rank data for all fifteen bitcoin apps available at the time and use an established technique to estimate an index of downloads for each country considered. We find that, while downloads of bitcoin apps increased following the announcement, the observed effect was not especially pronounced in countries thought to have had troubled banking systems at the time.
Banning bitcoinJournal of Economic Behavior & Organization
2017 We employ a monetary model with endogenous search and random consumption preferences to consider the extent to which a government can ban an alternative currency, like bitcoin. We define a ban as a policy whereby government agents refuse to accept an alternative currency and mete out punishments to private agents caught using it. After identifying monetary equilibria where an alternative currency is accepted, we then derive the conditions under which a ban might deter its use. As in earlier studies, we show that a government of sufficient size can prevent an alternative currency from circulating without relying on punishments. We also show that, given its size, a government can ban an alternative currency so long as it is willing and able to mete out sufficiently severe punishments.
The Political Economy of BitcoinEconomic Inquiry
2015 The recent proliferation of bitcoin has been a boon for users but might pose problems for governments. Indeed, some governments have already taken steps to ban or discourage the use of bitcoin. In a model with endogenous matching and random consumption preferences, we find multiple monetary equilibria including one in which bitcoin coexists with official currency. We then identify the conditions under which government transactions policy might deter the use of bitcoin. We show that such a policy becomes more difficult if some users strictly prefer bitcoin because they can avoid other users holding the official currency in the matching process.
Cryptocurrencies, Network Effects, and Switching CostsContemporary Economic Policy
2015 Cryptocurrencies are digital alternatives to traditional government-issued paper monies. Given the current state of technology and skepticism regarding the future purchasing power of existing monies, why have cryptocurrencies failed to gain widespread acceptance? I offer an explanation based on network effects and switching costs. In order to articulate the problem that agents considering cryptocurrencies face, I employ a simple model developed by Dowd and Greenaway (1993) (Dowd, K., and D. Greenaway. “Currency Competition, Network Externalities, and Switching Costs: Towards an Alternative View of Optimum Currency Areas.” The Economic Journal, 103(420), 1993, 1180–89). The model demonstrates that agents may fail to adopt an alternative currency when network effects and switching costs are present, even if all agents agree that the prevailing currency is inferior. The limited success of bitcoin—almost certainly the most popular cryptocurrency to date—serves to illustrate. After briefly surveying episodes of successful monetary transition, I conclude that cryptocurrencies like bitcoin are unlikely to generate widespread acceptance in the absence of either significant monetary instability or government support.