Robert W. Clower's article "A Reconsideration of the Microfoundations of Monetary Theory" (1967) deeply influenced the course of modern monetary economics. On the one hand, it revealed the deadlocks of Don Patinkin's project to integrate monetary and Walrasian value theory. On the other hand, it...

The transcript of a panel discussion marking the fiftieth anniversary of John Muth's "Rational Expectations and the Theory of Price Movements" (Econometrica 1961). The panel consists of Michael Lovell, Robert Lucas, Dale Mortensen, Robert Shiller, and Neil Wallace. The discussion is moderated by...

Around 50 years ago, Edmund Phelps and Robert Lucas proposed an answer to the question why changes in aggregate nominal spending bring about output and employment effects, instead of purely proportional variations in prices. The Phelps-Lucas monetary misperception hypothesis asserted that...

Translation of old economic doctrines into new technical frameworks led the profession to lose a valid theory of monetary non-neutrality. The theory relates to how additional money diffuses through the economy after entering at different points. Diffusion takes time, redistributes resources, and...

During the late-1940s and the early-1950s Milton Friedman favored a rule under which fiscal policy would be used to generate changes in the money supply with the aim of stabilizing output at full employment. He believed that the economy is inherently unstable because of endogenous movements in...

This paper discusses the role played by NY Fed economist Robert Roosa and Paul Samuelson in the emergence of the literature on credit rationing at the beginning of the 1950s. I argue that, contrary to the story one can find in the technical surveys, an intermediate step between Roosa and the...

The paper investigates the role played by Friedman’s interpretation of the Brazilian inflation in his 1967 formulation of the natural rate hypothesis and in his 1976 discussion of indexation and other institutional arrangements in the face of chronic inflation. It is argued that, as an...

Ben Bernanke researched monetary policy for over 25 years prior to becoming a policymaker, and his two-term career as Chairman of the Federal Reserve featured a severe recession coupled with a financial crisis, a chief subject of Bernanke's research. His reaction to economic events is noteworthy...

The explicit concepts of a central bank and monetary policy were not fully articulated until the 20th century, although, with some degree of circumspection, they can be used retrospectively in regard to earlier times. The oldest central banks were hardly central banks in the modern sense at...