a speech at the Center for Economic Policy Studies and on the occasion of the Seventy-Fifth Anniversary of the Woodrow Wilson School of Public and International Affairs, Princeton University, Princeton, New Jersey

remarks at the Economic Club of New York, New York, New York, April 11, 2011

Nowadays, with the diffusion of inflation targeting, the main instrument that central banks use to achieve final objectives in the implementation of monetary policy (concerning inflation and unemployment) is the interest rate. Furthermore, recent studies point out that central bank transparency...

Nowadays, with the diffusion of inflation targeting, the main instrument that central banks use to achieve final objectives in the implementation of monetary policy (concerning inflation and unemployment) is the interest rate. Furthermore, recent studies point out that central bank transparency...

We review the literature regarding the impact of financial innovation on the monetary transmission mechanism and on the way the central bank can achieve its ultimate goal, that is to control the price level. We argue that, although the form ofcentral bank instruments and current methods for...