A discussion of the relationship between money and output, with emphasis on the possibility that changes in output precede changes in money.

A Taylor rule captures the historical behavior of the federal funds rate better when it also includes a partial-adjustment factor. Typically, the type of partial adjustment added is consistent with the FOMC avoiding large jumps in the level of the funds rate. We add another type of partial...

Low inflation over long periods is the sign of an effective central bank. The authors suggest that a large fraction of the worldwide decline in inflation since the early 1980s results from an international movement toward more independent central banks.

If a central bank adopted a zero inflation target, it would, in practice, occasionally deviate up and down from that rate, and the economy would experience episodes of mild inflation and deflation. Is deflation-a decrease in the level of prices-a cause for concern? Deflation can cause output to...

Observations that the Phillips curve may be deviating from historical norms are important to policymakers because deviations would imply that more or less output has to be sacrificed to achieve a permanent reduction in long-term inflation. But we argue that recent economic shocks and a shift in...

A look at some of the reasons behind the ascent in health care costs over the last few decades and an analysis of how government policy has both contributed to and tried to rein in these costs.

Is inflation (in the often-quoted words of Milton Friedman) "always and everywhere a monetary phenomenon"? Some say no, arguing that inflation is controlled not only by the central bank but also by the fiscal authority. This Commentary authors explore their argument, known as the fiscal theory...

An examination of contagious bank runs and a discussion of how private clearinghouses have protected against widespread bank failures, with the determination that federal deposit insurance may not be necessary to protect against runs; conclusion of February 1 issue.

The Taylor rule, which once was mentioned only in scholarly economics journals, now is popping up regularly in newsmagazines, finance journals, and central bankers' speeches. Does the Fed follow the rule? Should it? This Commentary explains what the Taylor rule is, discusses why it seems to...

A look at how the cost and quality of medical services in the United States would be affected by enterprise liability, a malpractice reform proposal that would 1) transfer liability in malpractice cases from the doctor to the patient's health care plan and 2) institute no-fault malpractice...