莫卡特斯中心-什么是货币标准？美联储应该告诉我们（英）-2023.7-34页_641kb

Summary of "What Is the Monetary Standard? The Fed Should Tell Us" by Robert L. Hetzel

This working paper argues that the Federal Open Market Committee (FOMC) must explicitly define the monetary standard to improve transparency, accountability, and monetary policy effectiveness. Hetzel revives the historical debate between traditional Keynesianism and Wicksellian monetarism to address conflicting views on inflation and economic stability.

Core Debate

• Traditional Keynesianism: Assumes inflation is nonmonetary, resulting from real factors like supply shocks or aggregate demand imbalances. Policy should focus on balancing unemployment and inflation through discretionary tools, such as the Phillips curve, to manage tradeoffs.
• Wicksellian Monetarism: Assumes inflation is monetary, driven by deviations from the natural rate of interest. Policy should prioritize price stability by tracking the natural rate, allowing market forces to stabilize output and employment.

Arguments for Transparency

Hetzel contends that the implicit FOMC monetary standard hinders learning and accountability. Greater transparency would enable historical evaluation of policy successes and failures, facilitate public debate on the optimal monetary standard, and address issues like the role of central banks in credit allocation versus price stability.

Historical Context

The paper traces the evolution of the monetary standard through key periods, including post-World War II reforms, the Volcker-Greenspan era (Great Moderation), and post-crisis policies under Bernanke and Powell. The COVID-19 response, including flexible average inflation targeting (FAIT), is criticized for abandoning price stability principles and reintroducing Keynesian tradeoffs.

Conclusion and Recommendations

Hetzel calls for the FOMC to articulate its chosen monetary standard, emphasizing the need for a rule-based reaction function that prioritizes price stability or accommodates dual mandates. Enhanced transparency, such as releasing Tealbooks sooner, could support this debate. Ultimately, resolving the core debate is crucial for designing an optimal monetary standard and avoiding destabilizing policies.