The Taylor rule has become the dominant model for academic evaluation of out-of-sample exchange rate predictability. Two versions of the Taylor rule model are the Taylor rule fundamentals model, where the variables that enter the Taylor rule are used to forecast exchange rate changes, and the...

I consider whether a rules-based fiat money system can outperform the gold standard in delivering economic stability. I discuss the potential objectives of monetary policy in Section 1 and the means for achieving the objective in Section 2. I turn to questions of political economy in Section 3....

Anniversaries are occasions for remembrance and reflections on one's history. Many central banks take the occasion of an anniversary to publish books on their history. In this essay we discuss five recent books on the history of central banking and monetary policy. In these volumes, the Great...

This paper proposes new measures of the effectiveness of inflation targeting (IT) and evaluates its main drivers in a (large) sample of advanced economies (AEs) and emerging market and developing economies (EMDEs). Using synthetic control methods, we find that IT has heterogeneous effects on...

With central banks becoming monetary authorities, research departments have become a core element of a modern central bank. Crucial elements of a central bank research department are contributing to monetary policymaking and sustaining a dialogue with the academic community. The importance of...

Gianni Toniolo was one of Italy's, and Europe's, foremost economic historians. Unfortunately, he suddenly passed away in November 2022, a few weeks after he had presented in Rome his newest book, the first volume of his history of the Bank of Italy, Storia della Banca d'Italia. Tomo I....

The paper examines the exercise, the efficiency, and the legitimacy of the monetary policy-making process. The goal of central bank autonomy in recent times is the outcome of a demand for price stability. The realisation of autonomy is also a consequence of the fragmentation of national decision...

Although Central Banks have pursued the same objectives throughout their existence, primarily price and financial stability, the interpretation of their role in doing so has varied. We identify three stable epochs, when such interpretations had stabilised, ie: 1.The Victorian era, 1840s to 1914; 2....

This paper describes the monetary policy response of countries during the inter-war period. How did central banks react to the Great Depression? How did countries balance the externals demands of the gold standard with domestic policy pressures? What was the optimal level of international policy...