For immediate release: May 24, 2002
DALLAS—The Federal Reserve Bank of Dallas will issue the first article of its all-electronic Economic and Financial Policy Review this week
The online publication supersedes the Bank Economic and Financial Review, a print publication. The new Review, whose name was changed to emphasize the policy nature of the publication, will contain articles centered specifically on issues in contemporary economic and financial policy, based on solid research and written at a level accessible to a nontechnical audience.
Economic and Financial Policy Review premier article, "Alternative Monetary Constitutions and the Quest for Price Stability," examines the various means through which governments and central banks have sought to guarantee long-run price stability. Authors Finn Kydland and Mark Wynne argue that monetary regimes or standards can all be viewed as more or less successful attempts to overcome the well-known time-consistency problem in monetary policy.
The classical gold standard, which prevailed in the late 19th and early 20th centuries, can be interpreted as a monetary policy rule that delivered long-run price stability, the authors say. The fiat monetary standard adopted by countries following the abandonment of gold allows greater discretion on the part of monetary policymakers and has been characterized by greater long-run price instability.
Countries have tried through a variety of means to regain the benefits of price stability that prevailed under the earlier gold standard by limiting the scope for discretionary actions on the part of central bankers. A close analogy exists between the gold standard and the currency board arrangements proposed for many emerging market economies in recent years.
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