The New Patent Intermediaries: Platforms, Defensive Aggregators, and Super-Aggregators

[Symposium: Patents]

By Andrei Hagiu and David B. Yoffie

Journal of Economic Perspectives, Winter 2013

The patent market consists mainly of privately negotiated, bilateral transactions, either sales or cross-licenses, between large companies. There is no eBay, Amazon, New York Stock Exchange, or Kelley's Blue Book equivalent for patents, and when buyers a...

Monetary Commitment and Fiscal Discretion: The Optimal Policy Mix

By Stefano Gnocchi

American Economic Journal: Macroeconomics, April 2013

We study a noncooperative policy game between monetary and fiscal policy, where only monetary policy can commit to future actions. The equilibrium outcome of the game depends on the strategies available to the monetary policymaker. If strategies are le...

Paper Money

By Christopher A. Sims

American Economic Review, April 2013

Drastic changes in central bank operations and monetary institutions in recent years have made previously standard approaches to explaining the determination of the price level obsolete. Recent expansions of central bank balance sheets and of the levels...

Glass-Steagall: A Requiem

By Robert E. Lucas Jr.

American Economic Review, May 2013

This paper is a discussion of monetary efficiency, monetary safety, and the relation of the 1933 Glass-Steagall Act to both. It contains speculation about whether a modified version of the Act could have postponed or prevented the crisis of 2008.

Shifting Mandates: The Federal Reserve's First Centennial

By Carmen M. Reinhart and Kenneth S. Rogoff

American Economic Review, May 2013

The Federal Reserve's mandate has evolved considerably over the organization's hundred-year history. It was changed from an initial focus in 1913 on financial stability, to fiscal financing in World War II and its aftermath, to a strong anti-inflation foc...

The Most Dangerous Idea in Federal Reserve History: Monetary Policy Doesn't Matter

By Christina D. Romer and David H. Romer

American Economic Review, May 2013

Monetary policy-makers' beliefs about how the economy functions are a key determinant of the conduct of policy. That monetary policy has little impact under the prevailing circumstances is a belief which has resurfaced periodically over the Federal Reserv...

Not Just the Great Contraction: Friedman and Schwartz's A Monetary History of the United States 1867 to 1960

By Michael D. Bordo and Hugh Rockoff

American Economic Review, May 2013

Milton Friedman and Anna J. Schwartz published A Monetary History of the United States: 1867 to 1960 with Princeton University Press in 1963, to critical acclaim. Since then the book's reputation has grown and it clearly has become one of the most influen...

The Missing Transmission Mechanism in the Monetary Explanation of the Great Depression

By Christina D. Romer and David H. Romer

American Economic Review, May 2013

This paper examines the missing transmission mechanism in Friedman's and Schwartz's monetary explanation of the Great Depression. We review the challenge provided by the decline in nominal interest rates in the early 1930s, and show that the monetary expl...

The Mystique Surrounding the Central Bank's Balance Sheet, Applied to the European Crisis

By Ricardo Reis

American Economic Review, May 2013

A central bank's resource constraint bounds the dividends it can distribute by the present value of seignorage, which is a modest share of GDP. This is in spite of the mystique behind a central bank's balance sheet. Moreover, the statutes of the Federal R...

Capital Controls with International Reserve Accumulation: Can This Be Optimal?

By Philippe Bacchetta, Kenza Benhima, and Yannick Kalantzis

American Economic Journal: Macroeconomics, July 2013

Motivated by the Chinese experience, we analyze an economy where the central bank has access to international capital markets, but the private sector does not. The central bank is modeled as a Ramsey planner who can choose the domestic interest rate an...

A Century of US Central Banking: Goals, Frameworks, Accountability

[Symposium: The First 100 Years of the Federal Reserve]

By Ben S. Bernanke

Journal of Economic Perspectives, Fall 2013

Several key episodes in the 100-year history of the Federal Reserve have been referred to in various contexts with the adjective "Great" attached to them: the Great Experiment of the Federal Reserve's founding, the Great Depression, the Great Inflation ...

Central Bank Design

[Symposium: The First 100 Years of the Federal Reserve]

By Ricardo Reis

Journal of Economic Perspectives, Fall 2013

Starting with a blank slate, how could one design the institutions of a central bank for the United States? This paper explores the question of how to design a central bank, drawing on the relevant economic literature and historical experiences while st...

The Federal Reserve and Panic Prevention: The Roles of Financial Regulation and Lender of Last Resort

[Symposium: The First 100 Years of the Federal Reserve]

By Gary Gorton and Andrew Metrick

Journal of Economic Perspectives, Fall 2013

This paper surveys the role of the Federal Reserve within the financial regulatory system, with particular attention to the interaction of the Fed's role as both a supervisor and a lender-of-last-resort. The institutional design of the Federal Reserve S...

Shifts in US Federal Reserve Goals and Tactics for Monetary Policy: A Role for Penitence?

[Symposium: The First 100 Years of the Federal Reserve]

By Julio J. Rotemberg

Journal of Economic Perspectives, Fall 2013

This paper considers some of the large changes in the Federal Reserve's approach to monetary policy. It shows that, in some important cases, critics who were successful in arguing that past Fed approaches were responsible for mistakes that caused harm ...

Does the Federal Reserve Care about the Rest of the World?

[Symposium: The First 100 Years of the Federal Reserve]

By Barry Eichengreen

Journal of Economic Perspectives, Fall 2013

Many economists are accustomed to thinking about Federal Reserve policy in terms of the institution's "dual mandate," which refers to price stability and high employment, and in which the exchange rate and other international variables matter only insof...

An Interview with Paul Volcker

[Symposium: The First 100 Years of the Federal Reserve]

By Martin Feldstein

Journal of Economic Perspectives, Fall 2013

Martin Feldstein interviewed Paul Volcker in Cambridge, Massachusetts, on July 10, 2013, as part of a conference at the National Bureau of Economic Research on "The First 100 Years of the Federal Reserve: The Policy Record, Lessons Learned, and Prospect...

Public Communication and Information Acquisition

By Ryan Chahrour

American Economic Journal: Macroeconomics, July 2014

This paper models the tradeoff, perceived by central banks and other public actors, between providing the public with useful information and the risk of overwhelming it with excessive communication. An information authority chooses how many signals to pro...

The Macroeconomics of Trend Inflation

By Guido Ascari and Argia M. Sbordone

Journal of Economic Literature, September 2014

Most macroeconomic models for monetary policy analysis are approximated around a zero inflation steady state, but most central banks target an inflation rate of about 2 percent. Many economists have recently proposed even higher inflation targets to reduc...

Monetary Policy without Interest Rates: Evidence from France's Golden Age (1948 to 1973) Using a Narrative Approach

By Eric Monnet

American Economic Journal: Macroeconomics, October 2014

Central banking in France from 1948 to 1973 was a paradigmatic example of a policy that relied on quantities rather than interest rates. Standard SVAR analyses support the common view that monetary policy was ineffective during this period. However, th...

The Political Economy of the Greek Debt Crisis: A Tale of Two Bailouts

By Silvia Ardagna and Francesco Caselli

American Economic Journal: Macroeconomics, October 2014

We review the events that led to the May 2010 and July 2011 bailout agreements. We interpret the bailouts as outcomes of political-economy equilibria. We argue that these equilibria were likely not on the Pareto frontier, and sketch political-economy a...