This paper discusses the current 'new consensus' view on monetary policy and the theoretical framework on which that practical view relies, namely, the 'targets-and-instrument approach'. We argue that in the modern world of financial innovation and liability management central banks cannot...

One of the greatest achievements of the modern 'New Consensus' view in macroeconomics is the assertion of a non-quantity-theoretic approach to monetary policy. Leading theoricians and practitioners of this view have indeed rejected the quantity theory of money, and defended a return to the old...

The 2010s have witnessed a new shift in central banking and, partially at least, in monetary economics and macroeconomic modelling. It is a fact that the endogenous money theory has been gradually clawing back popularity at the expense of the classical theory of interest rates, the financial...

In academic and policy circles, the assumption is often made that the Fed and the European Central Bank (ECB) have a perfectly identical understanding of what monetary policy can achieve and they follow the same policy strategy. This assumption seats uncomfortably with the different legislative...

This paper develops an undergraduate macroeconomics teaching model that features endogenous money and an explicit account of commercial bank behaviour. It therefore transcends common shortcomings of existing teaching models based on either IS-LM or its successor, the New Consensus. The model is...

One of the greatest achievements of the modern mainstream approach to monetary policy is to have rejected the old quantity-theoretic framework, and to have replaced it with a Wicksellian two-interest-rate analysis, which closely reflects the actual behavior of central banks around the world....

One of the greatest achievements of the modern 'New Consensus' view in macroeconomics is the assertion of a non-quantity-theoretic approach to monetary policy. Leading theoricians and practitioners of this view have indeed rejected the quantity theory of money, and defended a return to the old...