Category Archives: Monetary Policy

Central Banks Going Beyond Their Range

Economist John Eatwell of Cambridge and I published a joint letter in the Financial Times today. We argue that monetary policy is off track and that other policies are sorely needed. I said the same in a CNBC interview from Miami … Continue reading

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Kocherlakota on the Fed and the Taylor Rule

The use of policy rules to analyze monetary policy has been a growing area of research for several decades, and the pace has picked up recently. Last month Janet Yellen presented a policy framework for the future centered around a … Continue reading

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Think Again and Again About the Natural Rate of Interest

In a recent Wall Street Journal piece, “Think You Know the Natural Rate of Interest? Think Again,” James Mackintosh warns about the high level of uncertainty in recent estimates of the equilibrium interest rate—commonly called r* or the natural rate—that … Continue reading

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Jackson Hole XXXV

Everyone keeps asking about this year’s Jackson Hole monetary conference and how it compared with the first. Well, I wrote about the first on my way to this conference, and I have to say the thirty fifth lived up to its billing … Continue reading

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A Less Weird Time at Jackson Hole?

I’m on my way to join the world’s central bankers at Jackson Hole for the 35th annual monetary-policy conference in the Grand Teton Mountains. I attended the first monetary-policy conference there in 1982, and I may be the only person … Continue reading

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An Economic and Security Policy Blueprint for America

A timely new policy book, Blueprint for America, edited by George P. Shultz, is being released today online for the first time. The release coincides with the start of platform writing by Republicans this week and Democrats the following week, … Continue reading

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Solid Economic Support for Sensible Financial Reforms

Economic research, including work in the 1970s on time inconsistency, has long provided a rationale for central bank independence in conducting monetary policy. Indeed, the research encouraged the spread of central bank independence and inflation targeting around the world in … Continue reading

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Rules Are Green and Discretion Is Red in the Monetary Game

Raghuram Rajan, Governor of the Reserve Bank of India, is calling for a reform of the international monetary system.  He has been calling attention to problems in the system for a while, and now he is looking for a solution. … Continue reading

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New Test Finds No Impact of QE on Long-Term Interest Rate

The Fed’s stated purpose of quantitative easing (QE) was to lower long-term interest rates, and many papers have endeavored to test empirically whether it achieved that purpose. Some, such as the paper by Gagnon, Raskin, Remache, and Sack, have looked at … Continue reading

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The Fed’s Normalization: How Long and How Far?

The Monetary Policy Subcommittee of the House held a hearing yesterday on “Interest on Reserves and the Fed’s Balance Sheet,” a difficult, but important and timely subject as the Fed begins what it calls its normalization process, or its transition … Continue reading

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