United States Monetary Policy Research Articles

The Effects of American Policies - a new classical interpretaton

SUMMARY Patrick Minford argues that the major short‐run cause of disturbance in the world economy in the 1980s has been US macro‐economic policy. He suggests that the elimination of this source of distortion and instability from the world economy by reducing US budget deficits, coupled with other reforms to elimate market inefficiency, particularly labour market distortions, will provide the best hope for the regeneration of long‐run growth through the market mechanism. In line with the New Classical economics, he concludes that government attempts to reduce unemployment through reflation will be selfdefeating. RESUMEN Los efectos de las politicas de los Estados Unidos, una interpretacion neoclasica El autor argumenta que en el corto plazo, la causa mas importante de las perturbaciones ocurridas en la economia mundial en la decada de 1980, ha sido la politica macroeconomica de Estados Unidos. Sugiere que la eliminacion de esta fuente de distorsion e inestabilidad sobre la economia mundial, mediante la reduccion del deficit presupuestario de Estados Unidos junto con otras reformas para eliminar las ineficiencias del mercado, especialmente las distorsiones del mercado del trabajo, proporcionaran la mejor posibilidad para la regeneracion del crecimiento en el largo plazo atraves de los mecanismos del mercado. De acuerdo con la economia neoclasica, concluye que cualquier intento gubernamental para reducir el desempleo mediante reflacion sera auto‐derrotado. RESUME Les consequences de la politique americaine — une interpretation de l'ecole ‘New Classical’ Patrick Minford soutient que la cause principale a court‐terme de troubles dans l'economie mondiale des annees '80 a ete la politique macro‐economique des Etats Unis. Il suggere que l'elimination de cette source de distortion et d'instabilite de l'economie mondiale par la reduction du deficit budgetaire, de pair avec d'autres reformes pour eliminer l'inefficacite du marche, en particulier les distortions du marche du travail, fourniront le meilleur espoir pour la regeneration de la croissance a long terme par l'intermediaire du mecanisme du marche. Du meme avis que les etudes economiques de l'ecole ‘New Classical’ il conclut que les essais du gouvernement pour reduire le chomage par l'intermediaire d'une nouvelle inflation ne meneront a rien.

The Origins of International Economic Disorder: A Study of United States Monetary Policy from World War II to the Present

The Origins of International Economic Disorder: A Study of United States Monetary Policy from World War II to the Present

The Origins of International Economic Disorder: A Study of United States Monetary Policy from World War Two to the PresentFred Block Berkeley: University of California Press, 1977, pp. xii, 282

The Origins of International Economic Disorder: A Study of United States Monetary Policy from World War Two to the PresentFred Block Berkeley: University of California Press, 1977, pp. xii, 282

United States Monetary Policy

United States Monetary Policy

The euro-dollar and the internationalization of United States monetary policy

72 1024x768 The last two years have seen a series of monetary crises which have led a number of observers to the opinion that the international monetary system, as we have known it, is on its last legs. The essence of the problem is that it may not be possible to keep the gold standard or the gold exchange standard when various countries have policies which are not in harmony. The author comments on the changing landscape of the international monetary system, the problems it faces and the reforms that are being proposed. Although the consensus or community necessary to run it is lacking, it is argued that the fixed-rate system is the most liberal, open and international. Normal 0 14 /* Style Definitions */ table.MsoNormalTable {mso-style-name:Tabella normale; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:; mso-padding-alt:0pt 5.4pt 0pt 5.4pt; mso-para-margin:0pt; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:Times New Roman;}

Domestic and International Objectives of United States Monetary Policy

Domestic and International Objectives of United States Monetary Policy

The Ineffectiveness of Monetary Policy

The panel discussion of United States Monetary Policy sponsored by the Subcommittee on Economic Stabilization on December 6, 19541 reflected the prevailing fashion in this field of thought: Money is the regulator of prices and economic activity, and bank reserves are the regulator of the quantity of money; money and bank reserves can be regulated through monetary policy actions (changes in interest rates, changes in reserve requirements, open market operations) on the part of the Federal Reserve System; the Federal Reserve System is a sort of central planning commission responsible for the proper functioning of the American economy. People who hold these truths to be have no occasion to question them, even as savages do not question the self-evident truth that rain is regulated through magic. A conference of rain making experts would debate whether the rain magic was performed correctly and at the proper time, but would not question that magic controls the weather. Similarly our monetary experts debate whether the kind, degree and timing of monetary policy actions were correct, whether the effects of these actions were good or bad, but they do not question whether such actions have any effects on prices and economic activity at all. Yet this is the question that must be raised and answered. And an objective look at the evidence would disclose that monetary policy can not control prices and economic activity; that as a regulator of the economy it is comparable to the rain magic employed by savages to regulate the weather; that it can do nothing and has done nothing to aid economic stability as claimed by Secretary of the Treasury Humphrey, by Mr. William McChesney Martin, Jr., Chairman of the Board of Governors of the Federal Reserve System, and by others; nor to upset stability and boom, as charged by Mr. John D. Clark and others. Before setting forth the reasons for denying the efficacy of monetary policy some qualifications must be recognized and the question at issue further clarified: 1. It is undeniable that monetary policy actions have some effects on prices and economic activity. Everything that happens has some effect, however remote, on everything else. The question is how important are the effects. The assertion that monetary policy has no effects on prices and economic activity must be understood to mean that the effects are infinitesimal and hence unim-