Category Archives: Monetary Policy

I am writing from Tokyo where I have spent a few days at the Bank of Japan. This week marked the first exchange market intervention by the Bank of Japan since March 16, 2004, a day I remember well because … Continue reading →

In tomorrow’s Wall Street Journal there is a symposium on monetary policy in which Richard Fisher, Rick Mishkin, Vince Reinhart, Allan Meltzer, Ron McKinnon and I participate. One of the points I make in my piece is that another massive … Continue reading →

Do you have a new proposal for monetary policy? Perhaps a new policy rule? If so, it would be good to try out your idea first on a model of the economy. See how it works. Better yet, since economic … Continue reading →

The Taylor rule says that the federal funds rate should equal 1.5 times the inflation rate plus .5 times the GDP gap plus 1. Currently the inflation rate is about 1.5 percent and the GDP gap is about -5 percent … Continue reading →

I write from Jackson Hole Wyoming as the early morning sun shines sharply on the Grand Tetons where I just spent a very enjoyable few days at the annual monetary conference. I have been coming to these Jackson Hole conferences … Continue reading →

Each year for the past 25 years the National Bureau of Economic Research has sponsored a conference on macroeconomics with a special emphasis on empirical research with policy relevance. The results are published in the NBER Macroeconomics Annual. Initiated by … Continue reading →

For about two years—from August 2007 to September 2009—fluctuations in the spread between dollar Libor and the overnight index swap (OIS) served as a valuable quantitative indicator of financial stress in the interbank loan market. It also served as a … Continue reading →

In his recent review in The New York Review of Books of my book Getting Off Track, Roger Alcaly makes a very interesting point about the “too low for too long” hypothesis, according to which the Fed helped cause the … Continue reading →

Today’s hearing at the House Committee on Financial Services on “Unwinding Emergency Federal Reserve Liquidity Programs and Implications for Economic Recovery” was cancelled because of snow. The hearing was to focus on whether the Fed’s extraordinary measures have worked and … Continue reading →

Much continues to be written this week about whether interest rates were too low for too long in the period 2003-2005 . David Papell posted a useful guest analysis on Econbrowser this morning showing that the target federal funds interest … Continue reading →