The standard workhorse models of monetary policy now commonly in use, both for teaching macroeconomics to students and for supporting policymaking within many central banks, are incapable of incorporating the most widely accepted accounts of how the 2007-9 financial crisis occurred and incapable...

The extraordinary increase in reliance on debt by U.S. business in the 1980s has generated widespread concern that overextended borrowers may become unable to meet their obligations and that proliferating defaults could then lead to some kind of rupture of the financial system, with ensuing...

The threat to monetary policy from the electronic revolution in banking is the possibility of a decoupling' of the operations of the central bank from markets in which financial claims are created and transacted in ways that, at some operative margin, affect the decisions of households and firms...

This paper reports empirical results indicating that there is no compelling evidence in favor of singling outany one variable as "the intermediate target" of monetary policy. Of the variables considered here - including money (M1), credit, a long-term interest rate, and whichever of either...

The collapse in the 1980s of familiar relationships connecting money to either income or prices has thrown into question long-standing presumptions about the appropriate conduct of monetary policy. Once data from the 1980s are included, tests of several kinds -- including simple regression...

The notion of targets and instruments is basic to the conceptual framework that economists have used to bring economic analysis to bear on practical issues of how central banks can and/or should conduct monetary policy. This paper surveys the literature of targets and instruments of monetary...

The prevailing view of the economic consequences of financing government deficits, as reflected in the recent economics literature and in recent public policy debates, reflects serious misunderstandings. Debt-financed deficits need not "crowd out" any private investment, and may even "crowd in"...

The maturity structure of the U.S. government's outstanding debt has undergone large changes over time, at least in part because of shifts in the Treasury's debt management policy. During most of the post World War I1 period, an emphasis on short-term issues rapidly reduced the debt's average...

The principal criteria for the selection of an intermediate target for monetary policy are (1) that the target be closely related to the nonfinancial objectives of monetary policy, (2) that it contain information about the future movements of those relevant aspects of the nonfinancial economy,...