In this paper, the problem of why low-purchasing power silver coins depreciated relative to high-purchasing power gold coins is examined. The standard explanation by Sargent and Velde is refuted. It is argued that the relative stability of gold was due to the demand from consumers able to detect...

This paper shows that properly designed interest rate rules can be consistent withmaintaining exchange rate stability. It sheds light on the relation between interest rate rules,exchange rate regimes, and determinacy of the rational expectation equilibrium in a modernmacroeconomic framework.[...]

The volatility of real GDP growth in the United States hasfallen by half since the early 1980s relative to the priorpostwar experience.1 Inflation also stabilized around then(although only when compared with a shorter period ofvolatility in the 1970s). Some studies have argued that animprovement...