The 'New Consensus' View of Monetary Policy: A New Wicksellian Connection?
AbstractOne 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 Wicksellian idea of eliminating high levels of inflation by adjusting nominal interest rates to changes in the price level. This paper evaluates these recent developments in the theory and practice of monetary policy in terms of two basic questions, namely what is the monetary policy instrument controlled by the central bank, and which macroeconomic variables are affected in the short and long run by monetary policy.
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Bibliographic InfoArticle provided by Edward Elgar in its journal Intervention. European Journal of Economics and Economic Policies (subtitle initially: Zeitschrift fuer Oekonomie / Journal of Economics).
Volume (Year): 3 (2006)
Issue (Month): 2 ()
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Web page: http://www.elgaronline.com/ejeep
Wicksell; monetary policy; New Consensus; endogenous money;
Find related papers by JEL classification:
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
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