After assessing the role of a Reserve Bank in the Federal Reserve System, the author compares the Eurosystem with the Fed System, and offers suggestions for the Eurosystem based on the Fed's experience. A regional presence facilitates surveillance of the economy and helps a central bank to...

The term structure of interest rates serves both as a vital link in the transmission of monetary policy and as an indicator of inflation expectations. The term structure is used here in a new application to address the 'policy in the pipeline problem.' Likewise, a peso-problem interpretation...

This article employs contract theory to analyze the evolution of the payments system. Insights gained are used subsequently to evaluate three prominent public payments system policies: monetary policy, central bank lending, and deposit insurance

Macroeconomics is moving toward a New Neoclassical Synthesis, which like the synthesis of the 1960s melds Classical with Keynesian ideas. This paper describes the key features of the new synthesis and its implications for the role of monetary policy. We find that the New Neoclassical Synthesis...

The paper describes key aspects of actual Federal Reserve interest rate targeting procedures and addresses a number of issues in light of these stylized facts. It reviews the connection between rate smoothing and price level trend-stationarity. It critiques interest rate targeting as inflation...

The evolution and structure of the payments system is explained by efficiency gains from substituting claims on particular institutions for commodity money. Information-intensive lending and payments services have been provided jointly by the same set of institutions, i.e., banks, because...

This article discusses a technical aspect of the Federal Reserve's monetary targeting procedure that has come to be known as "base drift." The Fed has been announcing larger ranges for the growth of M1 and other monetary aggregates since 1975. These ranges have been expressed in terms of rates...

The paper contains a theoretical discussion of the role of secrecy in the implementation of monetary policy. It documents the Federal Reserve's defense of secrecy as argued in a recent Freedom of Information Act suit. The Federal Reserve's arguments are evaluated on the basis of economic theory....

Financial deregulation is widely understood to have important economic benefits for microeconomic reasons. Since Adam Smith, economists have provided arguments and evidence that unfettered private markets yield outcomes that are superior to public sector alternatives. But financial...

This paper is intended as a positive analysis of temporary government policy actions under a gold standard. To understand a gold standard is to understand the private valuation of money and gold as assets, and how their asset values can be influenced by government money and gold policy actions...