Handbook of Monetary Economics: Vol 3B

What are the goals of monetary policy and how are they transmitted?

Top scholars summarize recent evidence on the roles of money in the economy, the effects of information, and the growing importance of nonbank financial institutions. Their investigations lead to questions about standard presumptions about the rationality of asset markets and renewed interest in fiscal-monetary connections. Stopping short of advocating conclusions about the ideal conduct of policy, the authors focus instead on analytical methods and the changing interactions among the ingredients and properties that inform monetary models. The influences between economic performance and monetary policy regimes can be both grand and muted, and this volume clarifies the present state of this continually evolving relationship.

• Presents extensive coverage of monetary policy theories with an eye toward questions raised by the recent financial crisis
• Explores the ingredients, properties, and implications of models that inform monetary policy
• Observes changes in the formulation of monetary policies over the last 25 years

Michael Woodford is the John Bates Clark Professor of Political Economy at Columbia University. His first academic appointment was at Columbia in 1984, after which he held positions at the University of Chicago and Princeton University, before returning to Columbia in 2004. He received his A.B. from the University of Chicago, his J.D. from Yale Law School, and his Ph.D. in Economics from the Massachusetts Institute of Technology. He has been a MacArthur Fellow and a Guggenheim Fellow, and is a Fellow of the American Academy of Arts and Sciences, as well as a Fellow of the Econometric Society, a Research Associate of the National Bureau of Economic Research (Cambridge, Mass.), and a Research Fellow of the Centre for Economic Policy Research (London). In 2007 he was awarded the Deutsche Bank Prize in Financial Economics. Woodford’s primary research interests are in macroeconomic theory and monetary policy. He has written extensively about the microeconomic foundations of the monetary transmission mechanism, the role of interest rates in inflation determination, rules for the conduct of monetary policy, central-bank communication policy, interactions between monetary and fiscal policy, and the consequences of electronic payments for monetary control. His most important work is the treatise Interest and Prices: Foundations of a Theory of Monetary Policy, recipient of the 2003 Association of American Publishers Award for Best Professional/Scholarly Book in Economics. He is the co-editor of the Handbook in Economics series.