The "New Consensus" View of Monetary Policy: A New Wicksellian Connection?
One of the greatest achievements of the modern "New Consensus" view in macroeconomics is the assertion of a nonquantity theoretic approach to monetary policy. Leading theorists 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: 1) What is the monetary policy instrument controlled by the central bank? and 2) Which macroeconomic variables are affected in the short and long run by monetary policy?
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Philip Arestis & Malcolm Sawyer, 2003.
"The Nature and Role of Monetary Policy When Money Is Endogenous,"
Economics Working Paper Archive
wp_374, Levy Economics Institute.
- Philip Arestis & Malcolm Sawyer, 2006. "The nature and role of monetary policy when money is endogenous," Cambridge Journal of Economics, Oxford University Press, vol. 30(6), pages 847-860, November.
- Lilia Costabile, 2005. "Money, cycles and capital formation: von Mises the "Austrian" vs. Robertson the "Dynamist"," Cambridge Journal of Economics, Oxford University Press, vol. 29(5), pages 685-707, September.
- Boianovsky, Mauro & Trautwein, Hans-Michael, 2006. "Wicksell after Woodford," Journal of the History of Economic Thought, Cambridge University Press, vol. 28(02), pages 171-185, June.
- Hicks, J. R., 1979. "Critical Essays in Monetary Theory," OUP Catalogue, Oxford University Press, number 9780198284239.
- Thomas J. Sargent, 1982.
"The Ends of Four Big Inflations,"
in: Inflation: Causes and Effects, pages 41-98
National Bureau of Economic Research, Inc.
- James Tobin, 1969.
"Money and Income: Post Hoc Ergo Propter Hoc?,"
Cowles Foundation Discussion Papers
283, Cowles Foundation for Research in Economics, Yale University.
- Laurence Ball, 1999. "Aggregate demand and Long-Run Unemployment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 30(2), pages 189-252.
- Thomas M. Humphrey, 2002. "Knut Wicksell and Gustav Cassel on the cumulative process and the price-stabilizing policy rule," Economic Quarterly, Federal Reserve Bank of Richmond, issue Sum, pages 59-83.
- Roberto Tamborini, 2006. "Back to Wicksell? In search of the foundations of practical monetary policy," Department of Economics Working Papers 0602, Department of Economics, University of Trento, Italia.
- Arestis, Philip & Mariscal, Iris Biefang-Frisancho, 1998.
"Capital shortages and asymmetries in UK unemployment,"
Structural Change and Economic Dynamics,
Elsevier, vol. 9(2), pages 189-204, June.
- Philip Arestis & Iris Biefang-Frisancho Mariscal, . "Capital Shortages and Asymmetries in UK Unemployment," Working Papers 9607, University of East London, Department of Economics.
- Giuseppe Fontana, 2004. "Hicks on monetary theory and history: money as endogenous money," Cambridge Journal of Economics, Oxford University Press, vol. 28(1), pages 73-88, January.
- Giuseppe Fontana & Alfonso Palacio-Vera, 2004. "Monetary Policy Uncovered: Theory and Practice," International Review of Applied Economics, Taylor & Francis Journals, vol. 18(1), pages 1-19.
- George T. McCandless, Jr. & Warren E. Weber, 1995. "Some monetary facts," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Sum, pages 2-11.
When requesting a correction, please mention this item's handle: RePEc:lev:wrkpap:wp_476. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie-Celeste Edwards)
If references are entirely missing, you can add them using this form.