An overview of recent theoretical and policy-related developments in monetary economics.

A groundbreaking work that paves the way for a new, pro-active financial system With The Monetary System, innovative author pairing Jean-Francois Serval and Jean-Pascal Tranie devise a comprehensive economic modeling system that accounts for the unprecedented situation facing international and regional economies by developing a controversial new stance on the operation of money in society. Presenting a classification of financial instruments with a view toward their underlying legal structures, the book sheds new light on the present economic and financial problems of slow growth and rising debts, and proposes possible outcomes for the global economy. The authors have already gained international attention with their novel approach to currency, and now they turn their attention to the social function of money in all its myriad forms. The book provides a way forward in an era of increased life expectancy and other new social patterns and the social role of money provides a framework for understanding intergenerational redistribution—an urgently pressing task in our time. New aggregate financial categories and economic modeling reveal a possible foundation for increased financial stability Companion website includes key mathematical models, accounting standards, and PowerPoint slides Comprehensive theoretical underpinning presents the contemporary model of money as a social contract Insights into the current economic situation make sense of sovereign debt risk in markets around the world With questions and answers at the end of each chapter, The Monetary System will help you form a new conception of the role of money in society. Improved regulation and tax policies are needed to stabilize the global economy, and this book provides the framework for getting there.

With the collapse of the Bretton Woods system, any pretense of a connection of the world's currencies to any real commodity has been abandoned. Yet since the 1980s, most central banks have abandoned money-growth targets as practical guidelines for monetary policy as well. How then can pure "fiat" currencies be managed so as to create confidence in the stability of national units of account? Interest and Prices seeks to provide theoretical foundations for a rule-based approach to monetary policy suitable for a world of instant communications and ever more efficient financial markets. In such a world, effective monetary policy requires that central banks construct a conscious and articulate account of what they are doing. Michael Woodford reexamines the foundations of monetary economics, and shows how interest-rate policy can be used to achieve an inflation target in the absence of either commodity backing or control of a monetary aggregate. The book further shows how the tools of modern macroeconomic theory can be used to design an optimal inflation-targeting regime--one that balances stabilization goals with the pursuit of price stability in a way that is grounded in an explicit welfare analysis, and that takes account of the "New Classical" critique of traditional policy evaluation exercises. It thus argues that rule-based policymaking need not mean adherence to a rigid framework unrelated to stabilization objectives for the sake of credibility, while at the same time showing the advantages of rule-based over purely discretionary policymaking.

21st Century Monetary Policy takes readers inside the Federal Reserve, explaining what it does and why. In response to the COVID-19 pandemic, the Federal Reserve deployed an extraordinary range of policy tools that helped prevent the collapse of the financial system and the U.S. economy. Chair Jerome Powell and his colleagues lent directly to U.S. businesses, purchased trillions of dollars of government securities, pumped dollars into the international financial system, and crafted a new framework for monetary policy that emphasized job creation. These strategies would have astonished Powell’s late-20th-century predecessors, from William McChesney Martin to Alan Greenspan, and the advent of these tools raises new questions about the future landscape of economic policy. In 21st Century Monetary Policy, Ben S. Bernanke—former chair of the Federal Reserve and one of the world’s leading economists—explains the Fed’s evolution and speculates on its future. Taking a fresh look at the bank’s policymaking over the past seventy years, including his own time as chair, Bernanke shows how changes in the economy have driven the Fed’s innovations. He also lays out new challenges confronting the Fed, including the return of inflation, cryptocurrencies, increased risks of financial instability, and threats to its independence. Beyond explaining the central bank’s new policymaking tools, Bernanke also captures the drama of moments when so much hung on the Fed’s decisions, as well as the personalities and philosophies of those who led the institution.

Everybody uses money every day, but we rarely stop to think about how money works. In this book, scholars from different disciplines seek to answer that question; from historians to economists, sociologists, a philosopher and a physicist. Money works as a social construction because we have mutual expectations that support its use – despite the seeming irrationality of trading valuable things or doing strenuous work for pieces of paper or numbers in accounts. Recently, there has been a revival of interest in monetary theory, not least because the impacts of globalizing markets and of new communication and information technologies have changed the forms of money. The deep crisis of the financial system has demonstrated the importance of a functioning monetary system and although renewed interest in this has led to significant contributions in various fields, it remains true that no social science discipline on its own is sufficiently equipped to explain the basic workings of monetary systems, their rapid innovation and their effects on social, economic and political structures. The contributors to this book report on their latest research on the origins of money, on the nature of monetary transactions, on money and the state, and on the role of money and finance in the recent global crisis. They show how established theories of money and the policies guided by these theories went wrong. This collection will be a valuable resource for students and researchers seeking a deeper understanding of money.

Bridging the theory and practice of monetary policy, this book presents aspects of the New-Keynesian theory of monetary policy and its implications for the practical decision-making of central bankers. It also outlines important lessons for policymakers.

This is the first comprehensive presentation of how monetary policymakers can use market prices to produce price stability. Drs. Johnson and Keleher show why other, conventional methods have failed and why market prices are superior guides for setting monetary policy. Their book presents the rationale, history, and philosophy underlying their approach; offers three forms of empirical research evidence to support it; and then presents special methods to use market prices as policy setting guides. Important and challenging reading for monetary policymakers and economists, bankers, financial analysts, and professional investors, as well as their colleagues in the academic community with similar interests. Substantial changes involving revolutions in telecommunications and information processing, financial deregulation, and the global integration of financial markets have altered the environment in which central banks operate. This altered environment has undermined various conventional approaches to monetary policy. This book presents an alternative market price approach to monetary policy. The approach is easily adapted to the above-cited change: it adopts a price stabilization policy goal and uses key market prices from the commodity, foreign exchange, and bond markets as guides to policy. Commodity prices, foreign exchange rates, and bond yields represent proxies for the exchange rate between domestic money and (1) commodities, (2) foreign monies, and (3) future money (bonds), respectively. These market prices are assessed in conjunction with one another to yield policy guidance to the monetary authority. This book describes how this approach is carried out in practice. Empirical evidence support the approach from three perspectives. First, empirical support exists for each of the individual market price indicators examined in isolation. Second, market price indicators provided accurate signals for monetary policymakers during the post-Bretton Wood era. Had this market price approach been used by policymakers, the performance of the macroeconomy during this period likely would have been improved. Third, at least one historical episode demonstrates that when the approach was employed, economic performance was impressive, and price stability was, in fact, achieved.