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According to theories of evolution, species evolve according to survival imperatives generated by their physical environments. Traits are selected and rejected based on their adaptability to the structures of the physical world in which these species live. Biological differences mirror differences in climate; the acutely developed senses of many species have adapted either for capturing prey or eluding predators, and so forth. So too in economic systems do we observe changes in human behaviour modes and policies that suggest adaptation. With respect to money, scholars continue to look for the most important adaptation mechanisms to explain the evolution of international monetary relations. What was once the preserve of strictly economic analysis has now become open ground for a wider array of social scientific analyses. In only a few short decades the study of monetary relations has developed into a more fully multi- and interdisciplinary enterprise. The four books reviewed here represent some of the latest attempts at constructing a broader social scientific explanation of monetary history. These valuable works complement one another in filling gaps in the literature on a complex and more diverse adaptation of monetary relations. Above all they stand as impressive political economies of monetary relations. Moure and Kettell concentrate on specific cases of monetary policy transformation in the interwar period, while Flandreau et al. and Obstfeld and Taylor cover a broader evolutionary timeline. The value of the contributions lies in several factors.

We do two things in this paper. First, we look at some simple models of monetary decision making in a monetary union & ask how much more variable a country's output & inflation is likely to be if it joins the union. We answer this analytically & then go on to "calibrate" the simple model. The model has few structural equations, but it is useful in allowing us to examine how the variability of output & inflation are likely to change as key parameters change. Our conclusions on this front are likely to be sensitive to model specification. However, we also identify a second best issue concerning the optimal make-up of the monetary union that is likely to be more robust: namely that only when all members of the union have the same structural parameter values (& shocks are perfectly correlated) will it be optimal for a new member to have these same structural parameter values. 1 Table, 1 Figure, 1 Appendix, 36 References. Adapted from the source document.

This book investigates the interaction of effective goods demand with the wage-price spiral, and the impact of monetary policy on financial and the real markets from a Keynesian perspective. Endogenous business fluctuations are studied in the context of long-run distributive cycles in an advanced, rigorously formulated and quantitative setup. The material is developed by way of self-contained chapters on three levels of generality, an advanced textbook level, a research-oriented applied level and on a third level that shows how the interaction of real with financial markets has to be modelled

How many people should decide about monetary policy? In this paper, we take an empirical perspective on this issue, analyzing the relationship between the number of monetary policy decision-makers and monetary policy outcomes. Using a new data set that characterizes Monetary Policy Committees (MPCs) in more than 30 countries from 1960 through 2000, we find a U-shaped relation between the membership size of MPCs and inflation; our results suggest that the lowest level of inflation is reached at MPCs with about seven to ten members. Similar results are obtained for other measures, such as inflation variability and output growth. We also find that MPC size influences the success of monetary targeting regimes. In contrast, there is no evidence that either turnover rates of MPC members or the membership composition of MPCs affect economic outcomes.

Since the early 1990s, the IMF has been advising countries to shift to the use of indirect instruments for executing monetary policy. This paper provides information about a monetary policy instruments database, maintained by the Monetary and Capital Markets Department of the IMF. We offer an overview of the information contained in the database in the form of comparative summary tables and graphs to illustrate the use of monetary policy instruments by groups of countries (developing, emerging market and developed countries). The main trend that can be identified from the database information

Standard monetary policy is grounded in the quantity theory of money, which links changes in the general price level to excess money that would induce excess demand on the goods market. This article shows that this theoretical foundation is misleading and harmful to growth. This is so because price determination is multifaceted. Central banks, especially the European Central Bank, currently tighten credit conditions whereas money is not an issue. In this way, they act not only on demand but also on the supply of goods. The additional reference made to rational expectations is an aggravating factor. Is there another way to conduct monetary policy? In this article it is argued that circuit theory, which endorses Keynes's dismissal of the quantity theory of money and his proposal to instead consider money flows in relation to the formation and spending of incomes, provides a substitute for standard monetary policy. Inflation and deflation could be avoided through a new structural arrangement of banks' monetary and financial operations. Adapted from the source document.

This paper develops a business cycle model with a financial intermediation sector. Financial wealth is defined as a predetermined state variable. Both, the additional sector of financial intermediaries and predetermination of financial wealth, affect the demand for real financial wealth. If real financial wealth also enters the monetary policy rule, the conditions for stability and uniqueness of the macroeconomic equilibrium path change fundamentally compared to standard New Keynesian business cycle models. Here, real financial wealth is interpreted as a real broad monetary aggregate. Furthermore, different interest rate rules and their consequences for stability and uniqueness of the macroeconomic equilibrium path are considered. Two monetary policy rules are found to be feasible - i.e. if these monetary policy rules are applied there exists a stable and unique macroeconomic equilibrium path. Simulations of the model showed that the monetary policy rule considering inflation and broad money as indicators is optimal.

There has been a remarkable rise in the transparency of monetary policy during the last two decades. This paper provides an overview of the ways in which central banks have been providing more information about their monetary policymaking. Furthermore, it reviews the theoretical literature on monetary policy transparency and relevant empirical findings. The focus is on understanding two key developments, the notable increase in openness about macroeconomic prospects and the recent advance of forward policy guidance.