Monetary policy in the 2008-2009 recession

The recession that began with a cyclical peak in December 2007 originated in a combination of real shocks because of a fall in housing wealth and a fall in real income from an increase in energy prices. The most common explanation for the intensification of the recession that began in the late summer of 2008 is the propagation of these shocks through dysfunction in credit markets. The alternative explanation offered in this article emphasizes propagation through contractionary monetary policy. The first explanation stresses the importance of credit-market interventions (credit policy). The second emphasizes the importance of money creation (money-creation policy). According to Federal Open Market Committee (FOMC) Chairman William McChesney Martin, "The System should always be engaged in a ruthless examination of its past record" (FOMC Minutes, 11/26/68, 1,456).Monetary policy ; Credit

U.S. monetary policy and monetary policy and the ESCB

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Opinion: Milton Friedman and liberty

Economists

A quantity theory framework for monetary policy

Monetary policy ; Money theory

Maintaining price stability: a proposal

The Neal Resolution, now in Congress, would make price stability the dominant goal of monetary policy. The first of these two articles holds that policymakers’ discretion over the price level increases political conflict. Further, it argues that removing this discretion would restore the dollar to the role envisioned by the Framers of the Constitution. The second article proposes an instrument for measuring inflation expected by the market and argues that such a measure would encourage monetary policy-makers to maintain price stability.Inflation (Finance) ; Monetary policy ; Prices

How useful is M2 today?

One of the most difficult aspects of formulating monetary policy is assessing the impact of policy actions on the public's dollar spending. Historically, the behavior of M2 has offered considerable information about the impact of monetary policy on dollar spending. It appears likely that M2 will continue to offer useful information to the policymaker.Money supply

Japanese monetary policy: a quantity theory perspective

Monetary policy ; Japan

A primer on the importance of the money supply

An abstract for this article is not availableMoney supply

Maintaining price stability: a proposal

The Neal Resolution, now in Congress, would make price stability the dominant goal of monetary policy. The first of these two articles holds that policymakers’ discretion over the price level increases political conflict. Further, it argues that removing this discretion would restore the dollar to the role envisioned by the Framers of the Constitution. The second article proposes an instrument for measuring inflation expected by the market and argues that such a measure would encourage monetary policy-makers to maintain price stability.Inflation (Finance) ; Monetary policy ; Prices

Indexed bonds as an aid to monetary policy

A measure of the public’s expectation of inflation would assist the Fed in formulating monetary policy. In order to create such a measure, the U.S. Treasury could issue its debt in two forms: standard debt and debt indexed for inflation. The difference in yield on these two forms of debt would measure the public’s expectation of inflation.Monetary policy ; Treasury bonds ; Indexation (Economics)