In 1977, when I started my first job at the Federal Reserve Board as a staff economist in the Division of International Finance, it was an article of faith in central banking that secrecy about monetary policy decisions was the best policy: Central banks, as a rule, did not discuss these decisions, let alone their future policy intentions.
The 'boom-bust' cycle is generated by monetary intervention in the market, specifically bank credit expansion to business.
The monetary policy committee could either keep rates constant, increase them, or bring them down. There are three options possible compared to when it is accommodative.
Giving Northern Europe a veto over Southern Europe's budgets will not hold a monetary union together. The euro zone will continue to need the weaker countries to stomach decades of high unemployment to grind down wages.
Never let it be said that the world of international economics isn't exciting or adventurous. OK, I exaggerate, because not even the most imaginative mind could construe the annual meetings of the International Monetary Fund and World Bank to be a nail-biting barn burner.
The role of monetary policy is to smooth out business cycles by promoting steady inflation and healthy labor markets, but modern central bankers have taken an activist turn.
We have gotten to the point where everything the government does is counterproductive; the conclusion, of course, is that the government should do nothing at all, that is, should retire quickly from the monetary and economic scene and allow freedom and free markets to work.
I believe, unlike people that are totally free-market, laissez-faire fundamentalists, that there is an important role that the government can play - one, in providing public goods, whether it's education, health care, or other things, and two, supervising countercyclical policy - stimulus, whether it's monetary, fiscal, or otherwise.
Endorsing unconventional monetary policies unquestioningly is tantamount to saying that it is acceptable to distort asset prices if there are other domestic constraints on growth.
Beyond monetary policy, fiscal policy has traditionally played an important role in dealing with severe economic downturns.
After choosing monetary union, further political union and workable governance in Europe was always going to be necessary.
I do know some of the world's richest people. In monetary terms, they all performed very well. In terms of a fulfilling life, I am less sure.
