Category Archives: Monetary Policy

Many are worried that the exploding Federal debt and the expanded Federal Reserve Balance sheet will lead to a large increase in inflation. But when and how fast? A session at the recent American Economic Association meetings on the Great … Continue reading →

On New Years Day I wrote a piece on the surprising increase in the number of references to the Taylor rule in 2009. Little did I know that two days later Federal Reserve Board Chairman Ben Bernanke would start off … Continue reading →

Surprisingly, the Taylor rule was referred to more frequently than ever in 2009. According to Google Scholar more articles referred to it than in any year since 1993 when John Lipsky, now First Deputy Managing Director at the IMF, first … Continue reading →

Some of the big questions looming about the Fed’s exit strategy are if, when, and at what pace the Fed should draw down its huge portfolio of mortgage backed securities (MBS). At its meeting last week the Federal Open Market … Continue reading →

Big Think is conducting a series of video interviews with economists, market participants, journalists, policymakers and others on the financial crisis to try to answer the pressing question of “what went wrong.” This is an excellent idea. As former Treasury … Continue reading →

I’m always trying to find good ways to teach beginning economics students about monetary policy. For years I compared it to flying a fighter jet where you have to anticipate the actions of the other pilots, and if you get … Continue reading →

A year ago I wrote Getting Off Track one of the first books on the financial crisis. I argued, based on data available at the time, that government actions caused, prolonged and worsened the crisis. After a year of debate, … Continue reading →

This week was monetary policy week in Economics 1 at Stanford. It was also monetary policy week in Washington: the House Financial Services Committee surprisingly voted 43-26 for Ron Paul’s controversial bill to audit the Fed; the TARP inspector general … Continue reading →

Stories this week in the Wall Street Journal, the New York Times and the Washington Post focus on how Senator Chris Dodd’s new financial reform bill threatens the independence of the Federal Reserve. And Larry Kudlow took it up on … Continue reading →

This was another week with a lot of commentary on the Taylor Rule, and I am grateful to Jon Hilsenrath of the Wall Street Journal for suggesting an interview with me on the subject and posting it on Wednesday. He … Continue reading →