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OPTIMAL MONETARY POLICY: WHAT WE KNOW AND WHAT WE DON'T KNOW*
Author(s) -
Kocherlakota Narayana R.
Publication year - 2005
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/j.1468-2354.2005.00343.x
Subject(s) - monetary policy , economics , value (mathematics) , need to know , state (computer science) , positive economics , monetary economics , computer science , computer security , algorithm , machine learning
In this article, I examine the current state of knowledge about optimal monetary policy. I distinguish between two literatures, basic and applied. The basic literature is explicit about the frictions that generate a positive value for money and make it socially beneficial. The applied literature is not. I describe the recent lessons about monetary policy that we have learned from each literature and discuss how the two distinct approaches may be usefully combined.