Monetary policy has become firmly based on the use of interest rate as the key policy instrument, and in a one instrument-one target framework. The approach to monetary policy is closely associated with the new consensus in macroeconomics (NCM). This paper undertakes a critical appraisal of the...

In this paper we seek first to set out the economic analysis that underpins the ideas of what has been termed the "third way." The explicit mention of the "third way" is much diminished since the early days of the Blair government in the UK and the Schroeder government in Germany. We argue that...

Central bankers and many economists have abandoned "activist" policies and monetarism and adopted in their place a new view of the role of monetary policy. This view draws on many of the tenets of more traditional theories of money - monetarism's emphasis on inflation control and skepticism...