This article reviews some of the issues economists confront in attempting to compile facts about how monetary policy actions affect the economy.

This article characterizes the change in the nature of the money growth-inflation and unemployment-inflation relationships between the first and second halves of the twentieth century. The changes are substantial, and the authors discuss some of the implications for modeling inflation dynamics,...

This article explores a hypothesis about the take-off in inflation in the early 1970s. According to the expectations trap hypothesis, the Fed was driven to high money growth by a fear of violating the expectations of high inflation that existed at the time. The authors argue that this hypothesis...

The basic tension facing econometricians is that structural models are necessary for addressing monetary policy questions. But all models are, by their very nature, false. Econometric programs that focus on testing whether models are true will be ignored by practicing macroeconomists. The...

This article discusses the empirical performance of a widely used model of nominal rigidities: the Calvo model of sticky good prices. The authors argue that there is overwhelming evidence against this model. But this evidence is generated under three key assumptions: one, there is no lag between...

This article reviews and interprets the recent currency crises in Korea and Thailand. The authors argue that a prime causes of the crises were large, unfunded government guarantees to railing financial sectors.

This article studies the impact on aggregate economic activity of increases in defense purchases which are unrelated to other developments in the economy. The authors use empirical evidence to evaluate the predictions of several prominent models.