Category Archives: Monetary Policy
What We Wanted We Got: A Debate on the Fed’s Balance Sheet
A big question addressed at this year’s annual Hoover monetary conference was “The Future of the Central Bank Balance Sheet,” including the amount of reserve balances that banks hold at the Fed. The issue is one that “the [Federal Reserve] … Continue reading
Posted in Monetary Policy
Still Crazy After All These Years—And What About the Next 50
Yesterday I was talking to a friend in my office about the great benefit to students from writing undergraduate honors theses in their senior year. I have long advised students to do so, perhaps because of the rewarding experience I … Continue reading
Posted in Monetary Policy, Teaching Economics
Monetary Policy Getting Back on Track
In many ways, the Fed has begun to bring monetary policy back on track as it emphasizes a strategy and the use of monetary policy rules: On January 18 of last year, former Chair Janet Yellen described the Fed’s strategy … Continue reading
Posted in Monetary Policy
Unique Cooperative Research Effort
This week marks the 20-year anniversary of a “notable conference” on monetary policy as Ed Nelson, who reminded me, puts it. The conference took place at the Cheeca Lodge in the Florida Keys on January 15-17, 1998, and it resulted … Continue reading
Posted in Monetary Policy
The Fed’s Inflation Target and Policy Rules
The Brookings Institution held an interesting conference yesterday organized by David Wessel on “Should the Fed Stick with the 2 Percent Inflation Target or Rethink It?” Olivier Blanchard and Larry Summers argued, as they have elsewhere, that the Fed should … Continue reading
Posted in Monetary Policy
A Policy Rule Presented at a Conference 25 Years Ago Today
Ed Nelson sent me a nice note today saying that the past two days (November 20-21) mark “the twenty-fifth anniversary of the Carnegie-Rochester Conference at which you laid out your rule.” I had forgotten about the specific dates, but his … Continue reading
Posted in Monetary Policy, Teaching Economics
New Results on International Monetary Policy Presented at the Swiss National Bank
This week I gave the Swiss National Bank’s Annual Karl Brunner Lecture in Zurich, and I thank Thomas Jordan who introduced me and the hundreds of central bankers, bankers, and academics who filled the big auditorium. Karl was a brilliant, … Continue reading
Posted in International Economics, Monetary Policy
Still Learning From Milton Friedman: Version 3.0
We can still learn much from Milton Friedman, as we celebrate his 105th birthday today. Here I consider what we can learn from his participation in the monetary policy debates in the 1960s and 1970s. I draw from a 2002 … Continue reading
Posted in Monetary Policy
A Whole New Section on Policy Rules in Fed’s Report
The Federal Reserve Board’s semi-annual Monetary Policy Report issued by Chair Janet Yellen last Friday contains a whole new section called “Monetary Policy Rules and Their Role in the Federal Reserve’s Policy Process.” The section contains new information and is … Continue reading
Posted in Monetary Policy
Reserve Balances and the Fed’s Balance Sheet in the Future
An important part of the Fed’s normalization policy is to reduce its holdings of securities and thereby reserve balances—deposits of banks at the Fed—used to finance these holdings. As I argued when quantitative easing began in 2009, this reduction should … Continue reading
Posted in Financial Crisis, Monetary Policy, Regulatory Policy
