The Role of Monetary Policy

Abstract

There is wide agreement about the major goals of economic policy: high employment, stable prices, and rapid growth. There is less agreement that these goals are mutually compatible or, among those who regard them as incompatible, about the terms at which they can and should be substituted for one another. There is least agreement about the role that various instruments of policy can and should play in achieving the several goals.

American Economic Review, Vol. 58, No. 1 (March 1968), pp. 1–17.

Presidential address delivered at the Eightieth Annual Meeting of the American Economic Association, Washington, DC, December 29,1967.

I am indebted for helpful criticisms of earlier drafts to Armen Alchian, Gary Becker, Martin Bronfenbrenner, Arthur F. Burns, Phillip Cagan, David D. Friedman, Lawrence Harris, Harry G. Johnson, Homer Jones, Jerry Jordan, David Meiselman, Allan H. Meltzer, Theodore W. Schultz, Anna J. Schwartz, Herbert Stein, George J. Stigler, and James Tobin.