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Monetary policy matters now.
The classic Romer and Romer study showing that monetary policy matters was based precisely on the frequent use of monetary policy as a deliberate tool: The central part of the paper is a study of postwar U.S. monetary history.
While Mr. Warsh voted with his boss on monetary policy matters, as is Fed tradition, the former investment banker has made clear his concerns over recent financial policy, writing in November that "chronic short-termism in the conduct of economic policy has done much to bring us to this parlous point".
In this situation, monetary policy matters a great deal, and Mr. Bernanke's focus on avoiding deflation and hence limiting the problems for debtors does not seem inappropriate (for more on Mr. Bernanke, his motivations and actions, see David Wessel's book, "In Fed We Trust").
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Secondly, it turned out that, contrary to what Keynes had said in "The General Theory," monetary policy mattered a lot.
Having once argued bitterly about whether monetary policy mattered, economists now differ only about just how finely the central bank can tune the economy.The answer turns on the relationship between how fast the economy is actually growing and how fast it is capable of growing.
This model included the idea of money surprise: monetary policy only matters when it causes people to be surprised or confused by the price of goods changing relative to one another.
The search committee should identify and attract experienced professionals who would be able to put in place and maintain a credible independent monetary policy, no matter how loudly local politicians bang on the table.
Monetary policy makers are all hawks now.
To Mr George and his colleagues on the Bank's monetary policy committee, this matters a great deal.
As part of the deal, the new political entity will exercise a degree of autonomy in governing Mindanao while the national government retains authority over defense and security, foreign policy, monetary policy and citizenship matters.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com