Recent Developments in Monetary Policy Analysis: The Roles of Theory and Evidence

McCallum, Bennett T., Economic Quarterly - Federal Reserve Bank of Richmond

1. INTRODUCTION

Academic thinking about monetary economics-as well as macroeconomics more generally-has altered drastically since 1971-1973 and so has the practice of monetary policy. The former has passed through the rational expectations and real-business-cycle revolutions into today's "new neoclassical synthesis" whereas policymaking has rebounded, after a bad decade following the breakdown of the Bretton Woods system, into an era of low inflation that emphasizes the concepts of central bank independence, transparency, and accountability while exhibiting substantial interest in the consideration of alternative rules for the conduct of monetary policy.1

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Publication information: Article title: Recent Developments in Monetary Policy Analysis: The Roles of Theory and Evidence. Contributors: McCallum, Bennett T. - Author. Journal title: Economic Quarterly - Federal Reserve Bank of Richmond. Volume: 88. Issue: 1 Publication date: Winter 2002. Page number: 67+. © Federal Reserve Bank of Richmond Summer 2008. Provided by ProQuest LLC. All Rights Reserved.

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