The Hoover Institution will publish a new volume, edited by senior fellows John H. Cochrane and John B. Taylor, that reviews the strategies, tools, and communication practices the Federal Reserve system deploys to shape monetary policies for its dual-mandate goals of maximum employment and price stability.
Strategies for Monetary Policy is drawn from a May 3, 2019, conference at the Hoover Institution featuring economists, financial experts, and Federal Reserve policy makers.
“This year’s edition includes analysis from some of the brightest minds in monetary policy, contributing clear and cutting-edge ideas,” said Cochrane. “The book focuses on the strategies that monetary policy should follow in the next downturn, offering analysis and recommendations particularly relevant to the current moment, when that downturn has occurred in dramatic fashion following the COVID-19 pandemic.”
The contributors, including Federal Reserve vice chair Richard H. Clarida and Federal Open Market Committee vice chair John C. Williams, review central bank policy rules for the money supply and the interest rate, inflation-targeting policies, nominal gross domestic product (GDP) targeting, quantitative easing and asset purchases, negative interest rates, and other efforts to address credit market frictions. In addition, they discuss the effects the specific rules for the federal funds rate published in the Board of Governors’ semiannual Monetary Policy Report and on the Fed’s Monetary Policy Principles and Practices web page that the Fed considers in setting monetary policy. They also consider how the Fed’s attempts to fine-tune the economy may have exacerbated financial market volatility; the key issues that impact achievement of the Fed’s 2 percent inflation objective; and a review of potential options for enhancing the Fed’s monetary policy approach.
The volume includes key presentations by Kenneth Rogoff, James Hamilton, and Volker Wieland, discussions by Andrew Levin, Monika Piazzesi, Peter Ireland, David Papell, and debates from the two symposia included in the 2019 conference.
Papers and discussions from the first symposium, introduced by Hoover Institution distinguished fellow George P. Shultz, encompass the impact of markets on monetary policy. Participants include Mickey D. Levy, chief economist of the Americas and Asia at Berenberg Capital Markets LLC; Scott Minerd, chief investment officer at Guggenheim Investments; and Laurie Simon Hodrick, Hoover Institution visiting fellow and professor emerita of economics at the Columbia University Business School.
The second symposium, chaired by Charles I. Plosser, former CEO and president of the Federal Reserve Bank, Philadelphia, features papers from current Fed policy makers on putting monetary strategies into practice. Participants include CEOs and presidents from four Federal Reserve banks: James Bullard, St. Louis; Mary C. Daly, San Francisco; Robert Steven Kaplan, Dallas; and Loretta J. Mester, Cleveland.
“In today’s volatile economic environment, it is critical that policy makers, market practitioners, and scholars debate and have a free exchange of ideas about the future of monetary policy,” said Taylor. “Well-informed policies, utilizing the best data, economic theories, and guidelines, will ensure strong long-term growth and stability for the American economy.”
Acclaim for Strategies for Monetary Policy
“The cutting edge of debate among leading academics and policy makers on strength and limits of the current monetary policy framework is gathered in this volume. A must-read for understanding how monetary policy decisions have been taken and will be taken in the future.”
— Agustín Carstens, general manager of the Bank of International Settlements, former finance minister of Mexico, and former governor of the Bank of Mexico
About the Editors
John H. Cochrane is the Rose-Marie and Jack Anderson Senior Fellow at the Hoover Institution, a research associate of the National Bureau of Economic Research, and an adjunct scholar of the Cato Institute. Cochrane contributes editorial opinion essays to the Wall Street Journal and other publications and maintains the Grumpy Economist blog.
John B. Taylor is the Mary and Robert Raymond Professor of Economics at Stanford University and the George P. Shultz Senior Fellow in Economics at the Hoover Institution. He served on the President’s Council of Economic Advisers, as under secretary of the Treasury for international affairs, and on the G-20 Eminent Persons Group on Global Financial Governance.
Contributors and Discussants
Adrien Auclert, Michael D. Bordo, James Bullard, Charlie Calomiris, Richard H. Clarida, John H. Cochrane, Chris Crowe, Mary C. Daly, Sebastian Edwards, Andy Filardo, Peter Fisher, Krishna Guha, James D. Hamilton, Laurie Simon Hodrick, Peter Ireland, Robert Steven Kaplan, Jeff Lacker, Andrew Levin, Mickey D. Levy, Andrew Lilley, Thomas M. Mertens, Loretta J. Mester, Scott Minerd, Bill Nelson, David Papell, Monika Piazzesi, Charles I. Plosser, Kenneth Rogoff, Brian Sack, George Selgin, George P. Shultz, John B. Taylor, Kevin Warsh, Robert Wenzel, Volker Wieland, John C. Williams.
Strategies for Monetary Policy is available in print and e-book formats. Click here to read the e-book for free or purchase a hard cover copy.
For coverage opportunities, contact Jeffrey Marschner, 202-760-3187, jmarschner [at] stanford.edu.