Will Monetary Policy Become More of a Science?

43 Pages Posted: 31 Oct 2007 Last revised: 28 Jul 2010

See all articles by Frederic S. Mishkin

Frederic S. Mishkin

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER)

Date Written: October 2007

Abstract

This paper reviews the progress that the science of monetary policy has made over recent decades. This progress has significantly expanded the degree to which the practice of monetary policy reflects the application of a core set of "scientific principles". However, there remains, and will likely always remain, elements of art in the conduct of monetary policy: in other words, substantial judgment will always be needed to achieve desirable outcomes on both the inflation and employment fronts. However, as case studies discussed here suggest, even through art will always be a key element in the conduct of monetary policy, the more it is informed by good science, the more successful monetary policy will be.

Suggested Citation

Mishkin, Frederic S., Will Monetary Policy Become More of a Science? (October 2007). NBER Working Paper No. w13566. Available at SSRN: https://ssrn.com/abstract=1024980

Frederic S. Mishkin (Contact Author)

Columbia Business School - Finance and Economics ( email )

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National Bureau of Economic Research (NBER)

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