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Will Monetary Policy Become More of a Science?

  • Frederic S. Mishkin

This paper reviews the progress that the science of monetary policy has made over recent decades. This progress has significantly expanded the degree to which the practice of monetary policy reflects the application of a core set of "scientific principles". However, there remains, and will likely always remain, elements of art in the conduct of monetary policy: in other words, substantial judgment will always be needed to achieve desirable outcomes on both the inflation and employment fronts. However, as case studies discussed here suggest, even through art will always be a key element in the conduct of monetary policy, the more it is informed by good science, the more successful monetary policy will be.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13566.

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Date of creation: Oct 2007
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Publication status: published as Find out how to access preview-only content The Science and Practice of Monetary Policy Today 2010, pp 81-103 Will Monetary Policy Become More of a Science? Frederic S. Mishkin
Handle: RePEc:nbr:nberwo:13566
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