A proposal for establishing price stability as the sole objective of a European system of central banks.

U.S. firms are facing tough international competition, and the U.S. trade deficit has grown to a level that some find alarming. Why doesn't the United States respond by easing monetary policy to lower the dollar's exchange rate and reduce the price of U.S. goods in foreign markets? This...

An examination of credit flow rechanneling away from depository institutions over the past decade in response to evolving financial markets and regulatory structure, and a discussion of how this trend has complicated monetary policymaking.

An argument against attempts to achieve current-account objectives through monetary manipulation of nominal exchange rates, with an explanation of why such tampering--which for various reasons might appear politically attractive--ultimately harms economic welfare.

An argument that monetary policy can meet concerns about output and employment indirectly by keeping inflation stable, thus allowing people to make sound production and consumption decisions.

An exploration of the paradoxical link between interest rates and inflation in the short versus the long run, showing that it may be more difficult for a central bank to achieve credibility--and hence a less costly transition to a stable price environment--without first making the monetary...

An analysis of the Federal Reserve's use of the M2 monetary aggregate as both a short-term and long-term policy guide, asserting that the FOMC's tentative target range for M2 growth in 1990 permits ample opportunity for the inflation rate to either accelerate or decline during the next few years.

A growing number of observers seem to believe that official foreign exchange intervention offers a useful tool for managing the dollar’s descent. In particular situations, official transactions can sometimes produce temporary changes in exchange rates, but intervention does not permit...

An examination of the theoretical impact of an oil shortage on the U.S. economy and the problems that such shortages present for monetary policy.

Like the bank notes that circulated in this country from 1863 to 1913, stored-value cards substitute the liabilities of private banks for government and central-bank liabilities. This shift may have important implications for the federal budget, the money supply, and monetary policy.