"This paper examines what we have learned and how we should change our thinking about monetary policy strategy in the aftermath of the 2007-2009 financial crisis. It starts with a discussion of where the science of monetary policy was before the crisis and how central banks viewed monetary...

Experience with monetary targeting suggests that although it successfully controlled inflation in Switzerland and especially Germany, the special conditions that made it work reasonably well in those two countries are unlikely to be satisfied elsewhere. Inflation targeting is more likely to...