Findings from Georgetown University Broaden Understanding of Economics (The Constitutional Money Problem): Economics

2026 MAY 04 (NewsRx) -- By a News Reporter-Staff News Editor at NewsRx Policy and Law Daily -- Investigators discuss new findings in Economics. According to news reporting from Washington, District of Columbia, by NewsRx journalists, research stated, “We consider three aspects of the constitutional status of the U.S. Federal Reserve in this Article.”

Financial support for this research came from Frank J. Cicero Fund.

The news correspondents obtained a quote from the research from Georgetown University, “Under the Supreme Court’s contemporary approach to constitutional meaning, there is a surprising degree of doubt about whether key aspects of the Federal Reserve (or the Fed)-its independence from Congress and the President, and even its power to create money-are constitutional. We suggest this is reason to believe the Court’s dominant interpretive approaches generate implausible results, but identify a previously overlooked source of constitutional grounding for the Fed that better supports its authority and structure. We further sketch the potential limits, costs, and benefits of our suggestion. In particular, we propose that the structure and monetary authority of the Fed can be justified by the Article I, 8 borrowing power and by the Public Debt Clause of the Fourteenth Amendment. In 1935, eight members of the Court agreed that these provisions require credible commitments: to meaningfully exercise the borrowing power, Congress must be able to promise creditors it will not undermine the value of its debts. We argue that judicial enforcement of sovereign promises is unlikely to fulfill this goal. Instead, the exercise of monetary authority by independent central banks is the most promising current solution to the credible-sovereign-borrower problem. Nonetheless, we also argue that judges likely have a key role to play, both as a constitutional and normative matter, in central banking. Key monetary-policy decisions should proceed under standard administrative law procedures, including opportunities for judicial review.”

According to the news reporters, the research concluded: “Review would likely enhance bank independence from political actors, while potentially mitigating excess influence from private banks, who currently enjoy disproportionate weight in the Fed’s decision-making.”

This research has been peer-reviewed.

For more information on this research see: The Constitutional Money Problem. University of Chicago Law Review, 2025;92(2):333-373. University of Chicago Law Review can be contacted at: Univ Chicago Law Sch, 1111 E 60TH St, Chicago, IL 60637, USA.

Our news journalists report that additional information may be obtained by contacting Brian Galle, Georgetown University, Law Ctr, Tax Policy, Washington, DC 20001, United States.

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