Category Archives: Monetary Policy
Congratulations Banco de Mexico
Twenty years ago, a new legal requirement for central bank independence was introduced in Mexico. Here is the English translation: The State shall have a central bank, which shall be autonomous in exercising its function and management. Its main goal … Continue reading
Posted in Monetary Policy
Leave a comment
Big Question at Fund-Bank Meetings: What’s With QE3?
While the shutdown-debt limit talks continue in Washington, thousands of financial people from the private and the public sectors throughout the world (including me) crowded into town this weekend for the annual IMF-World Bank meetings. Aside from the shutdown, the … Continue reading
Where the New Chair Might Lead the Fed
Congratulations to Janet Yellen. The new chair’s most important challenge, in my view, is to lead the Fed toward a more predictable, less interventionist, more rules-based monetary policy of the kind that worked well when tried, as in the 1980s, 1990s … Continue reading
Posted in Monetary Policy
Leave a comment
Fed Policy: The Good, the Bad, and the Ugly
Last week I was invited by Macroeconomic Advisers to participate in their interesting annual Washington Policy Seminar, and to be on a panel with Larry Meyer. They called the panel: “Fed Policy: The Good, the Bad, and the Ugly.” So … Continue reading
Posted in Monetary Policy
Leave a comment
A Monetary Policy Rule That Works: Powerful New Evidence
In a recent paper (summarized here) Alex Nikolsko-Rzhevskyy, David Papell, and Ruxandra Prodan applied statistical tests to identify periods in recent U.S. history when Fed policy was “rules-based”—which they define in practice as Taylor rule periods—and periods when it was … Continue reading
Posted in Monetary Policy
Leave a comment
MacroMania on Nominal GDP Targeting and the Taylor Rule
David Andolfatto has a interesting technical piece on MacroMania called “Nominal GDP Targeting and the Taylor Rule” in which he derives a relationship between the two, following up on a point by Chris Waller, director of research at the St. Louis Fed. … Continue reading
Posted in Monetary Policy
Leave a comment
Detecting the Source of Our Recent Poor Economic Performance
I have been arguing that highly discretionary (versus rules-based) macro policy provides the best explanation for generally poor macroeconomic performance, such as recent years, in comparison with periods of good performance, such as the 1980s and 1990s. This was the … Continue reading
Posted in Financial Crisis, Monetary Policy, Slow Recovery
Leave a comment
Jackson Hole: Then and Now
Quite a few people expressed interest in my tweet on the very high ratio of men to women at the 1982 Jackson Hole conference: 23 to 1. A CNN Money story and Justin Wolfers tweet reported 6 to 1 this year. Some … Continue reading
Posted in Monetary Policy, Teaching Economics
Leave a comment
Forward Guidance as an Incipient Policy Rule at the BoE and ECB
At the Jackson Hole conference this weekend, Charlie Bean, deputy governor of the Bank of England, and Frank Smets, head of economic research at the European Central Bank both offered important and newsworthy clarifications of what their respective central banks … Continue reading
Posted in Monetary Policy
Leave a comment
Day 1 Papers at Jackson Hole Reveal Skepticism of Fed’s Unconventional Policy
The papers presented today (Day 1) at the Jackson Hole monetary conference by academics outside the Fed revealed considerable skepticism about the effectiveness of the Fed’s quantitative easing and forward guidance programs. Of course Fed officials did not express the same … Continue reading
Posted in Monetary Policy
Leave a comment
Economics One 