- Economics
- Monetary Policy
- Answering Challenges to Advanced Economies
How should the Fed finish the inflation-reduction job and prepare for the changing world ahead, addressing challenges of tariffs, supply chain “shocks,” and changes in the status of the dollar and the nature of international cooperation? Finishing the Inflation Job and New Challenges in Monetary Policy collects essays and discussions from the annual Hoover Institution Monetary Policy Conference, held on May 9, 2025, exploring these themes and considering other big-picture issues that affect monetary policy in this volatile international environment.
Each year, the conference brings together academics, policymakers, media members, and others to consider the issues affecting monetary policy, both in the United States and worldwide. In her welcoming remarks to the conference, Hoover Director Condoleezza Rice sets the tone, stating that the United States is “experiencing an avalanche of uncertainty,” with everything about the international order in question, including the United States’ role in it.
With inflation still stubbornly above the Federal Reserve’s 2% target at the time of the conference, how to finish the inflation-reduction job was a natural point of focus. But contributors also explore in depth many other challenges and questions on monetary policy that lie ahead: How should central banks counter a new surge of inflation, should one arise? What lessons should we take from the 2021–22 inflationary episode? Are tariffs the next supply shock? How should central banks adapt their formal strategies, constructed in an era of zero-interest rates and low inflation? How should financial regulation adapt to the uncertainties of geopolitics and the big technological innovations going on around us?
This year’s conference included a celebration of the life and career of John B. Taylor. Many essays convey this spirit of homage, noting the influence of Taylor and the Taylor rule on policymaking. Among its eight sections, the book proceeds by exploring current issues in finance and the financial regulation of cryptocurrency, the growing role of private credit, and how the history of the price stability objective reverberates in the present day. Monetary policy must adapt to this very new world.
Other contributors
Alan J. Auerbach, Michael D. Bordo, Michael J. Boskin, James B. Bullard, Charles W. Calomiris, Agustín G. Carstens, John H. Cochrane, John F. Cogan, Lisa D. Cook, Darrell Duffie, Kristin J. Forbes, Luis Garicano, Beth M. Hammack, Peter Blair Henry, Peter N. Ireland, Harold James, Arvind Krishnamurthy, Ross Levine, Mickey D. Levy, Hanno Lustig, Matteo Maggiori, H.R. McMaster, Christopher M. Meissner, Loretta J. Mester, Alberto G. Musalem, Charles I. Plosser, Condoleezza Rice, Isabel Schnabel, Torsten Slok, François R. Velde, Christopher J. Waller, Kevin M. Warsh, Volker Wieland, John C. Williams
Contents
Preface
Michael D. Bordo and John H. Cochrane
Welcoming Remarks
Condoleezza Rice
John Taylor and Taylor Rules in Policy
Introduction
Volker Wieland
1. Celebrating John Taylor
John C. Williams
2. John Taylor: A Reflection
Agustín G. Carstens
3.Thank You, John
Christopher J. Waller
4. Disciplined Judgement in Monetary Policymaking
Loretta J. Mester
5. Discretion Continues to Thwart Fed Efforts to Make Credible Commitments
Charles I. Plosser
6. Lessons Learned and the Path Ahead
Kevin M. Warsh
General Discussion
Volker Wieland, Harald Uhlig, Robert J. Barro, Jason Furman, Robert G. King, Pablo Villanueva, Kevin M. Warsh, Christopher J. Waller, Loretta J. Mester, Charles I. Plosser
Digital Assets, Payment Systems, and Financial Regulation
Introduction
Arvind Krishnamurthy
7. Tokenizing Reserves and Treasuries
Darrell Duffie
8. Let Banks Compete: Digital Money’s Challenge to Europe’s Protected Banking Model
Luis Garicano
9. How Stablecoins Will Transform Banking
Charles W. Calomiris
Finishing the Job, Risks Ahead
Introduction
Mickey D. Levy
10. Targeting Nominal GDP: A Monetarist Cross-Check for “Finishing the Job”
Peter N. Ireland
11. Fighting Inflation after the Pandemic: Lessons for the Next Battle
Kristin J. Forbes
12. Three Suggestions for Improved Macroeconomic and Monetary Policy
James B. Bullard
General Discussion
Mickey D. Levy, Kristin J. Forbes, James B. Bullard, Jason Furman, Michael J. Boskin, Steven J. Davis, Evan Koenig, Sebastián Edwards, Peter N. Ireland
The Growing Role of Private Credit
Introduction
Michael D. Bordo
13. The Growing Role of Private Credit
Torsten Slok
Global and Strategic Issues: Implications for Monetary and Fiscal Policy
Introduction
Power and Prosperity—Brief Remarks on Economics and National Security
Ross Levine
14. Unalienable Rights and Unbridled Entrepreneurship: Maintaining the Free World’s Competitive Advantages
H.R. McMaster
15. Remarks on US Fiscal and Geoeconomic Risks
Matteo Maggiori
16. Tariffs, Trade Wars, and Economic Policy as if History Matters
Christopher M. Meissner
17. Geopolitical Uncertainty and Economic Policy
Harold James
General Discussion
Ross Levine, Sebastián Edwards, Steven J. Davis, Matteo Maggiori, Harold James, Christopher M. Meissner, Krishna Guha, Kana Norimoto, Michael J. Boskin, H.R. McMaster
Fiscal Sustainability Issues and Their Implications for Monetary Policy
Introduction
John F. Cogan
18. Fiscal Unsustainability and the Risk of Inflation
Alan J. Auerbach
19. Comments on Fiscal Policy and Its Interactions with Monetary Policy
Michael J. Boskin
20. Fiscal Sustainability and Price Discovery in Government Bond Markets
Hanno Lustig
21. Fiscal Constraints on Monetary Policy
John H. Cochrane
General Discussion
John F. Cogan, Laurence M. Ball, Sebastián Edwards, Mickey D. Levy, Patrick Kehoe, Isabel Schnabel, John H. Cochrane, Hanno Lustig, Michael J. Boskin, Alan J. Auerbach
Introduction
Peter Blair Henry
22. Keeping a Steady Hand in an Unsteady World
Isabel Schnabel
23. US Economy Scenarios and Monetary Policy Response
Alberto G. Musalem
24. The Outlook for the Economy and Monetary Policy
Beth M. Hammack
25. Opening Remarks on Productivity Dynamics
Lisa D. Cook
General Discussion
Peter Blair Henry, David Papell, Darrell J. Duffie, Jason Furman, John H. Cochrane, Lisa D. Cook, Isabel Schnabel, Beth M. Hammack, Alberto G. Musalem, Torsten Slok, James B. Bullard, Patrick Kehoe, Elena Pastorino X
The Long History of the Price Stability Objective
Introduction
Michael D. Bordo
26. The Long History of the Price Stability Objective
François R. Velde
General Discussion
Michael D. Bordo, James B. Bullard, Andrew T. Levin, Sebastián Edwards, Jon Hartley, Hoyt Bleakley, Robert J. Barro
About the Hoover Institution’s Economic Policy Working Group
