Axel Leijonhufvud, 12 January 2009

This column explains how lack of regulation and failed monetary policy caused the failure of financial markets and then illustrates the banking crisis with simple arithmetic. It concludes that the automatic adjustment of free markets is ineffective in producing a recovery from this recession.

Axel Leijonhufvud, 13 May 2008

In CEPR Policy Insight No. 23, Axel Leijonhufvud asks not what we have learnt, but what we should have learnt from Keynes in light of the current financial turmoil.

Axel Leijonhufvud, 13 May 2008

The US Federal Reserve has used unorthodox policy instruments to reduce recent financial turmoil. In this column, the author of CEPR Policy Insight 23 argues that the crisis raises more fundamental questions about core tenets of modern monetary orthodoxy – inflation targeting and central bank independence.

Michael Woodford, 08 January 2008

The new strategy is not ‘stealth inflation targeting,’ but it matters for the Fed’s own deliberations. Here the world’s leading monetary theorist argues that forcing FOMC members to look years ahead will move policy towards a coherent strategy, away from a sequence of short-term decisions -- highly desirable since the anticipation of policy matters to its effectiveness.

Paul De Grauwe, 14 November 2007

Inflation targeting proponents view central banks’ responsibilities as minimalist. But the subprime crisis shows that central banks cannot avoid taking responsibilities that include the prevention of bubbles and the supervision of all institutions that are in the business of creating credit and liquidity.

Axel Leijonhufvud, 26 October 2007

The trouble with inflation targeting in present circumstances is that constant inflation gives you no information about whether your monetary policy has hit the Wicksellian 'natural rate'. Inflation targeting might mislead us into pursuing a policy that is actively damaging to financial stability.

Axel Leijonhufvud, 26 October 2007

Here's some deep thinking on the linkages between monetary policy and financial instability. The trouble with inflation targeting in present circumstances is that constant inflation gives you no information about whether your monetary policy has hit the Wicksellian ‘natural rate’. Inflation targeting might mislead us into pursuing a policy that is actively damaging to financial stability.

Janine Aron, John Muellbauer, 26 July 2007

Changes in openness to trade can disrupt the inflation forecasting on which many nations' monetary policies depend. New research suggests an innovative time-series openness measure that addresses some of the shortcomings of existing measures.

Axel Leijonhufvud, 25 June 2007

An expansionary monetary policy and an historical conjuncture that happens to produce no inflation will lead to asset price inflation and deterioration of credit. At some stage, central banks will have to mop the liquidity or see inflation do it for them.

Stephen Cecchetti, 13 June 2007

With inflation targets winning the world of Central Banking, methods for measuring inflation have direct policy consequences. The big question for inflation measurement is how to handle housing. The US methods are better than the ECB methods.

Andrew Rose, 31 May 2007

A new world financial 'non-system' is emerging consisting of nations with independent central banks that target inflation who let their exchange rates float, usually without controls on capital flows and often without intervention.

Stephen Cecchetti, 01 July 2006

Inflation targeting is best practice in 21st-century monetary policymaking. With some of its key academic proponents – Messrs. Bernanke and Mishkin – at the US Fed, there is some hope that the US will join the ranks of explicit inflation targeters.

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