Earlier this month, I had the privilege of speaking at a conference in honor of Allan Meltzer. It was a great conference with a number of excellent speakers (how I got on the list is anyone’s guess). Meltzer had an incredible influence on the profession through his work on monetary policy and the history of the Federal Reserve.
I was on a panel discussing Meltzer’s views on the monetary transmission mechanism. Anyone who is familiar with Meltzer’s work knows that this was a topic that he thought was of the utmost significance. For those not familiar with economic jargon, this line of research examines the various possible channels through which monetary policy affects economic activity. On the one hand, this research has been pretty influential in the sense that Ben Bernanke often sounded quite Meltzer-esque in his discussion of monetary transmission when justifying the Federal Reserve’s large scale asset purchases. On the other hand, much of the current literature on monetary policy fails to take into account many of Meltzer’s insights because this recent literature focuses too narrowly on the short term nominal interest rate.
I understand that they are putting together a book that collects the contributions of each of the speakers, but some of the material is already available online. I know of 3 papers that have been posted online, including my own (I’ll update this if I hear of others before the book comes out). These papers are linked below. I hope that those interested will take the time to wrestle with Meltzer’s arguments.
and my paper: