Standard monetary policy is grounded in the quantity theory of money, which links changes in the general price level to excess money that would induce excess demand on the goods market. This article shows that this theoretical foundation is misleading and harmful to growth. This is so because...

The economic crisis has seen central banks turn to some rather innovative practices in order to deal with the great recession. In particular, the Federal Reserve in the USA has made considerable use of what has been called 'quantitative easing'. This practice marked a great departure from...

The financial and economic crisis that has been devastating a number of countries in the world since its outbreak in 2007-2008 originates in the currently still dominant paradigm in both finance and economics. The contributions selected for this special issue explain collectively that the only...

Since the adoption of inflation targeting in New Zealand in 1990, a number of developed as well as developing and emerging market economies have followed suit. Often the sole goal of central bank policies, the strategy of inflation targeting is to reduce the inflation rate and, in some cases,...

Over the past several decades, monetary theory and policy have been rather consistent, giving credence to the old adage that "the more things change, the more they stay the same." Indeed, three constants in monetary policy can be identified: (1) central banks always strive for some form of price...

Post Keynesians advocate two distinct approaches to monetary and interest rate policy. The activist approach sees interest rates moved countercyclically to ensure strong growth and low employment. The parking-it approach, however, favors setting real or nominal rates at specific levels and...

iIn light of the growing interest in "new consensus" models, this paper examines Post Keynesian alternatives to the Taylor rule. It identifies two distinctive approaches to Post Keynesian interest rate policy, which we label the activist and the/i parking-it irules. The first approach advocates...