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Opinion: Resisting the Siren Song of Easy Money

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Abstract

In Homer's "The Odyssey," Odysseus has his crew tie him to the ship's mast to resist the deadly temptation of the sirens' song. A modern equivalent of this might be the screen time limits you set on your phone to help yourself limit any time wasting from scrolling in the face of algorithms designed to hold your attention. These are both examples of what economists call a commitment device — a mechanism by which you commit now to protect your future self from temptation. When the Federal Reserve was founded, the debate around its design took into account the siren song of easy money and enshrined central bank independence in its organization.

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  • Anna Kovner, 2026. "Opinion: Resisting the Siren Song of Easy Money," Econ Focus, Federal Reserve Bank of Richmond, vol. 26(Q1/Q2), March.
    • Handle: RePEc:fip:fedrrf:102899
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    File URL: https://www.richmondfed.org/publications/research/econ_focus/2026/q1-q2_opinion
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