This paper engages the last testimony of the Chairman of the Federal Reserve System, Alan Greenspan, before a joint session of Congress in July 2005. It identifies nine areas we relate to the arguments of John Kenneth Galbraith, summarized in his recent contribution, The Economics of Innocent...

From the "new consensus in macroeconomics" (NCM) framework, this paper derives a different set of policy proposals. The NCM has become associated with the use of interest rate policy to target inflation and to reach a zero output gap, and to ignore fiscal policy. This paper argues that interest...

This paper explores the macroeconomic consequences of interactions between fiscal and monetary policy, in an environment characterized by endogenous money in which the interest rate is set exogenously by the central bank. Three "benchmark" interest rate operating procedures are identified, none...

In the debate on monetary policy strategies on the two sides of the Atlantic, it is now almost commonplace to contrast the Fed and the European Central Bank (ECB) by pointing out the flexibility and capacity to adjust of the former and the rigidity and extreme caution of the latter, and its...

This comment provides a simple analytical exposition of the model used by Godley and Lavoie (2007a) to argue a case for fiscal stabilization policy. I show that the government-spending stabilization rule they propose ensures budget solvency as long as private-sector saving behavior is stable. If...

An inflation-augmented Atesoglu monetary policy rule is introduced. The Atesoglu rule is based on an estimate of the neutral rate of interest of Keynes. Actual Fed monetary policy and policy implied by Atesoglu rules are compared. During the 1994:2-2006:4 period, monetary policy suggested by the...

The role of monetary policy in the cyclical behavior of the labor share and capacity utilization in the U.S. economy is studied empirically. Previous estimation results remain robust; the inclusion of the rate of interest does not alter the underlying specification of the distributive demand...

This article presents an overview of monetary policy in Australia and highlights the persistence and volatility of inflation under successive monetary policy regimes, 1950-2010. A series of unit root tests specified both linearly and nonlinearly investigate whether inflation persistence has the...

In this paper, the Taylor rule and the Keynesian monetary policy rules recently introduced by Atesoglu are empirically compared for the 1994:2-2007:4 period. The findings reveal that the Atesoglu rule and the inflation-augmented Atesoglu rule are able to provide a better explanation of the...