RICHMOND, VA -- (Marketwire) -- 11/08/12 -- Implicitly, most central banks now reject the propositions of monetarism, argues Robert L. Hetzel in the latest issue of Economic Quarterly. They do not characterize themselves as creators of money, but instead emphasize their role in influencing financial intermediation. They do not discuss monetary policy in terms of a rule, but instead use the language of discretion. They refer to the low level of interest rates to characterize monetary policy as stimulative despite low rates of growth of money and nominal gross domestic product. Hetzel explores the question of whether monetarist ideas retain relevance for central banks.
You can find the full text of this article and others in the latest issue of Economic Quarterly on our website.
Also in the Second Quarter 2012 issue:
- The Performance of Non-Owner-Occupied Mortgages During the Housing Crisis by Breck L. Robinson
- On the Benefits of GDP-Indexed Government Debt: Lessons from a Model of Sovereign Defaults by Juan Carlos Hatchondo and Leonardo Martinez
The Economic Quarterly is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. For more information, contact the Federal Reserve Bank of Richmond's Research Department -- Publications at 800.322.0565 or visit www.richmondfed.org/research/.
The Richmond Fed serves the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. As part of the nation's central bank, we're one of 12 regional Reserve Banks that work together with the Federal Reserve's Board of Governors to strengthen the economy and our communities. We manage the nation's money supply to keep inflation low and help the economy grow. We also supervise and regulate financial institutions to help safeguard our nation's financial system and protect the integrity and efficiency of our payments system.
Director of Research
Federal Reserve Bank of Richmond
Federal Reserve Bank of Richmond Economic Quarterly