Category Archives: Monetary Policy

Today’s FOMC meeting and press conference clarified to some degree how large the Fed intends to let its balance sheet grow under quantitative easing.   Under the FOMC’s current economic outlook, the Fed intends to slow, before the end of the year, … Continue reading →

Paul Krugman’s reply to my post on Allan Meltzer’s and Paul Volcker’s critiques of monetary policy failed to mention what Paul Volcker has been saying. Yet Volcker’s views are important, especially since, as Krugman points out, he “deserves immense respect … Continue reading →

In a new piece called “Quantitative Quicksand” published in Project Syndicate, Allan Meltzer argues that the U.S. recovery would be better off if the Fed had not engaged in quantitative easing.  The banks are just loaning the extra liquidity to … Continue reading →

I’ve been speaking a lot about monetary policy recently: – Testifying at the Joint Economic Committee (JEC) last week – Delivering a dinner speech at the Atlanta Fed the week before that – Giving remarks at Mervyn King’s farewell conference on … Continue reading →

The Fed’s announcements yesterday increase monetary policy uncertainty in two fundamental ways. Quantitative Easing on Steroids? First, the new quantitative easing announcement implies a gigantic increase in the size of the Fed’s balance sheet and thus effectively an amplification of the … Continue reading →

For a respite from the saga of the fiscal cliff why not read some of the latest books on monetary economics and policy? Below is a list of books on money published in 2012 which I found to be interesting … Continue reading →

Like the Fed, the Hoover Press is experimenting with an extraordinary and unprecedented policy. It’s setting a key price very close to the zero lower bound and holding it there for a while. To be specific, the Press is having … Continue reading →

It was 20 years ago today at a conference in Pittsburgh that I first presented what is now called the Taylor rule. Here’s the November 1992 Stanford working paper. It’s nearly impossible to predict which ideas will be picked up … Continue reading →

Last Friday the University of Chicago hosted a wonderful Centennial Celebration of Milton Friedman and the Power of Ideas. All of the speakers, especially Jim Heckman, Kevin Murphy, Bob Lucas, and Gary Becker chose to focus on how amazingly well … Continue reading →

It has been a week now since the Fed’s QE3 announcement that it would be again buying mortgage backed securities (MBS). There was an initial decline in the mortgage spread on the announcement but, as often happens, that initial impact … Continue reading →