The book investigates the contemporary functioning of financial institutions and monetary policies in order to assess their effects in different economic situations. It advances some proposals to improve their contribution towards a more stable and vigorous economy in the context of both...

Lucas (1972) is the pathbreaking analysis of the neutrality and temporary non-neutrality of money. But our central banks set interest rate targets, and do not even pretend to control money supplies. How is inflation determined under an interest rate target?