Monetary Policy Strategy: How Did We Get Here?

  title={Monetary Policy Strategy: How Did We Get Here?},
  author={Frederic S. Mishkin},
  journal={NBER Working Paper Series},
This paper, which is the introductory chapter in my book, "Monetary Policy Strategy", forthcoming from MIT Press, outlines how thinking in academia and central banks about monetary policy strategy has evolved over time. It shows that six ideas that are now accepted by monetary authorities and governments in almost all countries of the world have led to improved monetary performance: 1) there is no long-run tradeoff between output (employment) and inflation; 2) expectations are critical to… 
Monetary Policy under Inflation Targeting: An Introduction
This brief review takes stock of the recent literature on monetary policy under inflation targeting and introduces new analytical and empirical research in this field. Six key areas of previous
Monetary policy frameworks: gradual implementation of steadily evolving theory
  • Economics
  • 2014
This Economic Brief reviews the main features of monetary policy frameworks implemented by the major central banks following the collapse of the Bretton Woods system of fixed exchange rates in the
The Effect of) Monetary and Exchange Rate Policies (on Development)
To the extent that they exert a critical influence on the macroeconomic environment, monetary and exchange rate policies (MERP) are relevant for development. However, the analytical economic
The Transition to Inflation Targeting in an Emerging Economy: Selected Issues
Monetary policy in Argentina is in transition to an inflation targeting regime with a floating exchange rate. As reviewed in this note, several measures have been taken to normalise the functioning
Inflation Targeting, Economic Stability and Monetary Policy:The Nigeria Experience
Since the late 1990s, a good numbers of emerging-market countries have adopted inflation targeting (IT) as a monetary policy framework. The hallmarks of this approach are an explicit commitment by
Monetary targeting and financial system characteristics : An empirical analysis
This paper investigates how reforms and characteristics of the financial system affect the likelihood of countries to abandon their strategy of monetary targeting. Apart from financial system
Abstract Has Inflation Targeting Improved Monetary Policy ? Evaluating Policy Effectiveness in Australia , Canada , and New Zealand
Has Inflation Targeting Improved Monetary Policy? Evaluating Policy Effectiveness in Australia, Canada, and New Zealand The degree to which explicit inflation targets contribute to the success of
Central Bank Performance under Inflation Targeting
The inflation targeting (IT) regime is 17 years old. With practice of IT now in more than 21 countries, there is enough evidence gathered to take stock of the IT experience. In this paper, we analyze


Price stability, inflation targets, and monetary policy: Conference summary
This article summarizes the proceedings of a conference hosted by the Bank of Canada in May 1997. The first conference held by the Bank on this subject was in 1993, two years after the introduction
A Positive Theory of Monetary Policy in a Natural Rate Model
A discretionary policymaker can create surprise inflation, which may reduce employment and raise government revenue. But when people understand the policymaker's objectives, these surprises cannot
With the collapse of the Bretton Woods system, any pretense of a connection of the world's currencies to any real commodity has been abandoned. Yet since the 1980s, most central banks have abandoned
Does Anticipated Monetary Policy Matter? An Econometric Investigation
A heated debate has arisen over the policy ineffectiveness proposition associate with the work of Lucas, Sargent, and Wallace. It postulates that anticipated aggregate demand policy will have no
How the Bundesbank Conducts Monetary Policy
This paper analyzes German monetary policy in the post-Bretton Woods era. Despite the public focus on monetary targeting, in practice, German monetary policy involves the management of short term
Should Central Banks Respond to Movements in Asset Prices
In recent decades, asset booms and busts have been important factors in macroeconomic fluctuations in both industrial and developing countries. In light of this experience, how, if at all, should