My lessons from six years of practical policy-making include (1) being clear about and not deviating from the mandate of flexible inflation targeting (price stability and the highest sustainable employment), including keeping average inflation over a longer period on target; (2) not adding...

The paper shows the advantages and handicaps of implementing an inflation target (IT) regime, from a Post-Keynesian and, thus, an institutional stance. It is Post-Keynesian as long as it does not perceive any benefit in the mainstream split between monetary and fiscal policies. And it is...

This paper studies the effects of the monetary policy regime shift to inflation targeting on the stochastic properties of the real interest rate in the U.K. The empirical analysis suggests a constant mean of the real interest rate that shifts with the monetary policy regime change to inflation...

This paper studies the shift in the role of monetary policy in Latin America during the 1990s. As in most industrial economies, in Latin America there has been a refocusing of the objectives pursued by monetary policy towards the achievement of price stab

Without a lender of last resort financial stability is not possible and systemic financial crises get out of control. During and after the Great Reces-sion the US Federal Reserve System (Fed) and the European Central Bank (ECB) took on the role of lender of last resort in a comprehensive way....

The expectations trap hypothesis is an influential but untested model of monetary policy. The hypothesis conjectures that high inflation during the 1970s was the outcome of a shift in private sector beliefs which were then validated by monetary policy. The subsequent fall in inflation was mainly...

Money privatization is seen as one of the main features of modern banking. The development of private payment arrangements and the globalization of banking have indeed led to a growing questioning of central banks' monopoly on the provision of money. This paper analyzes empirically the reality...

We compare three standard New Keynesian models differing only in their representations of monetary policy—the Optimal Timeless Rule, the original Taylor Rule and another with ‘interest rate smoothing’—with the aim of testing which if any can match the data according to the method of...

This paper addresses a number of questions which are essential to a proper understanding of the causes and effects of the inflationary process and to an assessment of the contribution of monetary policy to the achievement of long-term price stability. These questions are: (1) what are the...