Conducting Monetary Policy – Remarks by Governor Edward M. Gramlich

What is the goal of Moentary policy? It should be price stability according to Fed Governor Edward Gramlich who made his views known in a recent speech at the ASSA conference (AKA the AFAs) in Washington DC. “The long-run anchor is clearly price stability. Following Milton Friedman, inflation in the long run is a monetary phenomenon, as is deflation. Hence, the long-term goal … [ Read more ]

On the Effect of the Internet on International Trade

Abstract: The Internet stimulates trade. Using a gravity equation of trade among 56 countries, we find no evidence of an effect of the Internet on total trade flows in 1995 and only weak evidence of an effect in 1996. However, we find an increasing and significant impact from 1997 to 1999. Specifically, our results imply that a 10 percent increase in the relative number … [ Read more ]