Once again, the Federal Reserve is under attack from lawmakers who propose measures designed to increase the accountability of monetary policymakers while preserving the independence of the institution. Legislation that is currently the subject of debate on Capitol Hill would either remove the...

?We are in danger of assigning to monetary policy a larger role than it can perform, in danger of asking it to accomplish tasks that it cannot achieve, and, as a result, in danger of preventing it from making the contribution that it is capable of making.? Milton Friedman, 1968 At the time...

Much of this paper was presented at the Cato Institute conference on Monetary Policy in the New Economy, October 19, 2000, Washington, D.C.