Category Archives: 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
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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
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
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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
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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
R-Star Wars
In a recent speech at the Economic Club of New York, Fed Governor Jay Powell stated that the endpoint of the Fed’s normalization process “will occur when our target reaches the long-run neutral rate of interest. Estimates of that rate … Continue reading
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ECB Watching
Hundreds of financial market participants and news reporters showed up for the 18th annual “ECB and its Watchers” conference in Frankfurt last week. I was one of the speakers as I was at the first conference in 1999. It was … Continue reading
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A New Hearing and, Possibly, a New Phase in Monetary Policy
Today’s hearing of the House Monetary Policy subcommittee—the first of the new Congress with the new chair Andy Barr from Kentucky—provided a good opportunity to discuss policy in light of new and different decisions by the Fed, new and different … Continue reading
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Benefits of Comparing Policy with Reference Rules
In a recent VOX article, Henrike Michaelis and Volker Wieland write favorably about the approach taken by Fed Chair Janet Yellen in a recent speech where she compares recent Fed policy actions with several monetary policy rules—including the Taylor rule—much … Continue reading
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Monetary Policy Strategy Statements Should Have a Strategy
At its meeting this week the Fed decided not to post changes in its “Longer-Run Goals and Monetary Policy Strategy” as might have been expected as part of its annual organizational meeting actions as it did last year at this … Continue reading
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Economics One 