Category Archives: Monetary Policy

Many have asked me what I think about the letter criticizing QE2 which was signed by me and other economists. The letter has created quite a stir. I have already written and spoken many times explaining my oppostion to QE2, … Continue reading →

An unintended consequence of QE2 has been the strong openly voiced opposition from some of America’s traditional allies as well as those countries, like China, perceived to be on the other side of the bargaining table. So the Fed is … Continue reading →

No doubt there will be many empirical studies evaluating the impact of the Fed’s November 3 decision to begin another dose of quantitative easing (QE2). Ben Bernanke gave his first assessment of the impact of QE2 in an op-ed yesterday … Continue reading →

Many have asked whether Milton Friedman would have favored the type of massive quantitative easing which the Fed embarked on today. I have argued that he would not. In tomorrow’s Wall Street Journal, Allan Meltzer addresses the question and concludes … Continue reading →

A year and a half ago when the Fed’s extraordinary quantitative easing (QE) was shifting from emergency liquidity programs to large scale asset purchases, we convened a conference at Stanford’s Hoover Institution to discuss the shift. Jim Hamilton, of UC … Continue reading →

The effects of exchange market interventions are frequently estimated by looking at what happened on the day of the announcement of the intervention or of the intervention itself. But my observation—based in part on experience running the international division of … Continue reading →

I recently had the pleasure of reading, and then writing a review of, Allan Meltzer’s monumental A History of the Federal Reserve, Volume 2 which is published in Book 1 and Book 2. The lesson from this thorough 2,112-page history … Continue reading →

New empirical research establishes a strong relationship between very low interest rates set by the Fed, as in the period 2002-2005, and a risk-taking search for yield. This policy-induced lessening of risk aversion has been emphasized by Raghu Rajan and … Continue reading →

Last June the central bank of Norway hosted a fascinating conference in Oslo on the use of monetary policy rules in small open economies. The Norges Bank is a remarkably transparent central bank. As with the Swedish Riksbank, it announces … Continue reading →

For years economists and policymakers in the United State have been expressing fears that America would enter a Japanese-style deflation and thereby experience a lost decade like Japan in the 1990s. One of the earliest examples was the October 1999 … Continue reading →